Last night the office of the Minister for Transport, David Campbell, confirmed that the bill - which the Sydney Morning Herald revealed would threaten at least 45 rail lines in NSW - had been withdrawn.

The minister's office blamed the "heavy volume of legislation" this year and decisions by the Coalition and Greens to oppose the bill in the Legislative Council.

While the spokeswoman for the minister said the bill had been "put off until next year", Labor MPs told the Herald the legislation was dead because of the overwhelming reaction against it in key regional areas, such as the Hunter and the Far North Coast.

The Government claimed the bill was designed to allow unused rail lines to be converted to "rail trails" for hiking, biking and horseriding, but the original legislation would have allowed the minister to tear up lines and sell the rail corridors - including those through the centre of Newcastle and Byron Bay - to developers.

The Government amended the bill so rail corridors would be leased for 99 years, rather than sold, but it still threatened to end the historic protections for NSW rail tracks.

The Greens MP Lee Rhiannon - who along with the Nationals MP Duncan Gay and the Opposition transport spokeswoman, Gladys Berejiklian, campaigned against the plan - said the "100-year-old protection for rail lines has been safeguarded".

Labor MPs feared the legislation would further erode the party's vote, especially on the North Coast, where two federal Labor MPs, Janelle Saffin and the Minister for Ageing, Justine Elliot, face an election next year.