Depending on who you talk to in the New South Wales Greens, the upcoming federal preselection bout is either a tragic misunderstanding, a vainglorious last stand, or a battle for the party’s soul.

Among the various factions and rivals, however, one thing is agreed on: Senator Lee Rhiannon is in for a major fight.

Reticent after a year of devastating coverage and bound by strict internal rules on public comment during preselection campaigns, sources at various levels of the party requested anonymity to outline an unprecedented campaign that will push Rhiannon to the edge of her support and potentially conclude her 18-year parliamentary career with a humiliating defeat.

If the opposite occurs and Rhiannon maintains her top spot on the Greens NSW Senate ticket, the result will be broadly interpreted as a severe rebuke of Richard Di Natale’s leadership and pave the way for an awkward federal campaign.

Preselection is usually a formality for incumbent Greens MPs, but a confluence of circumstances has blown the race in NSW wide open. Rhiannon is facing an insurgency centred on Mehreen Faruqi, a popular member of the NSW upper house with broad internal appeal who has long had her eye on a move to Canberra.

Rhiannon had been widely expected to pull out and clear the way for Faruqi earlier in the year — or whoever won preselection — enabling a clean transfer of power and maximising the chances for a fresh candidate to cement the Greens’ tenuous hold on their single NSW Senate seat. Crikey understands those around Rhiannon had begun outlining plans for her exit later this year, with one source close to the Senator saying she had openly indicated she would not be running.

A former member of the Greens’ federal election campaign committee said it was understood Rhiannon’s 2016 Senate tilt would be her last.

“Everyone’s expectation was that Lee would run in that campaign and then she retires half way though her next term,” they said.

But, according to sources on both sides of the now emerging Rhiannon-Faruqi divide, that changed after a blow-up over the Greens’ deal to back the government’s “Gonski 2.0” legislation, which resulted in Rhiannon being temporarily banned from party room meetings in June.

[It’s not just leaflets: the power struggle behind Lee Rhiannon’s suspension]

The incident played into a perception among parts of the NSW Greens — particularly Rhiannon’s most loyal supporters — that the federal party generally (and Di Natale in particular) was trying to override grassroots autonomy and sideline the state’s left-wing faction.

With Rhiannon’s candidacy taking on a symbolic quality, some close advisers petitioned her to run again.

“What does it say to the federal Greens if we now get rid of Lee?” one campaigner wondered aloud.

According to one version of events outlined by sources with direct knowledge, Rhiannon and Faruqi spoke just days before the latter announced. The conversation left Faruqi with the impression Rhiannon was out. That is hotly denied by another source familiar with the matter who contended that, by this stage, “there was no ambiguity in [Rhiannon’s] position”.

Critics of Rhiannon more removed from the situation are sceptical of the Di Natale angle, and see it as a cover for her desire to hold on to power.

Either way, the result is a surprise preselection battle that breaks the pattern of recent contests and leaves Rhiannon, a crushing victor in previous run-offs, unusually exposed.

[What happens if the Greens expel Lee Rhiannon?]

In recent state contests, those backed by Rhiannon’s main antagonists have triumphed. Faruqi is not from this set but is expected to pick up a major chunk of their support as Rhiannon’s opponents seize their chance to dislodge her. Her backing also threatens to eat into Rhiannon’s own.

Liked across the party and possessing a powerful personal narrative — she would be the first Muslim woman in the Senate — Faruqi is being pushed as a candidate for “renewal” and “unity”.

A number of long-time backers of Rhiannon are confirmed to have crossed over.

“With a great deal of sadness, most people are not going to vote for Lee,” one party member remarked.

But those sticking with Rhiannon are digging in for a fight that will reach its crescendo in November. Rhiannon is thought to be most popular among Young Greens members as well as a highly active and organised section of the party. Her work ethic, commitment, and record are deeply respected by these people.

And the federal-state tensions have got them fired up.

“There’s no genuine neutrals in this fight now,” according to a source in Rhiannon’s camp.

“A vote for Mehreen is going to be seen as a vote in support of Di Natale.”

As another insider put it, some “would happily have Lee win preselection as a ‘fuck you’ to Richard”.

With campaigning yet to formally begin, supporters of both sides expressed admiration for their opponent and consternation at the easily avoidable predicament.

Faruqi declined an interview request, citing party rules, and Rhiannon was not contactable.

In an emailed statement, federal leader Richard Di Natale said: “As someone who is committed to grassroots democracy I respect the right of members in NSW to choose their own candidates and will respect whatever decision they make.”

The Greens haven’t won a NSW senate spot in a full election since Rhiannon snuck over the line in 2010, and they failed to snag a full quota at last year’s double-dissolution election.

If Rhiannon does triumph, Di Natale and the federal party will be forced to campaign alongside the candidate who ran against them or kiss a senate position goodbye.