A V8 Supercar championship race could be held at Sydney's Olympic Park.
The NSW government has given in-principle support to the proposal, but it will be subject to a feasibility study.
The plan to hold an annual race for the next five years is opposed by the board of the Sydney Olympic Park Authority.
But it's believed to have the backing of NSW Premier Morris Iemma, who first proposed the idea two years ago before backflipping, News Ltd has reported.
The decision to support the race was made last month after a report on the NSW tourism industry was released, criticising the government's approach, Fairfax reported.
The race could cost taxpayers $30 million and involve ripping up kilometres of tarmac at Olympic Park and critics say V8 races in other cities have had mixed success.
NSW Greens MP Lee Rhiannon said tourism or economic benefits claimed to be generated from the race were illusory.
"The history of these events shows governments invest millions to end up with little more than a debt hangover."
