NSW Police Commissioner Karen Webb has flagged the dramatic intervention after union work bans again caused widespread disruption on the state's urban rail network on Friday morning.
"I have grave concerns," she told reporters.
"Each year we police New Year's Eve on the basis 250,000 people can come in and then safely leave the city.
"If trains aren't available and people can't leave the city, I have large concerns about the risk that will create to the public.
"I haven't ruled out that I will recommend to government that we cancel the fireworks. It's that serious."
Police Commissioner Karen Webb hasn't ruled out calling a halt to Sydney New Year's Eve fireworks. (Dean Lewins/AAP PHOTOS)
The state government plans to argue the industrial action could cause a risk to public safety on New Year's Eve at a scheduled Fair Work Commission hearing on Christmas eve.
Transport Minister Jo Haylen poured scorn on the union's portrayal that work bans were a means of getting the government back to the negotiating table.
"They say, 'well, let's talk about it'," she told reporters.
"But the fact is unless you agree with them, there's no end point."
New Year's Eve is the busiest day on Australia's largest rail network as millions of people are shuttled around Sydney Harbour and elsewhere in the city for the fireworks and other celebrations.
Some 3200 services run about every five minutes "to get people in and out safely", Ms Haylen said
Work bans forced scores of train delays and cancellations on Friday - many workers' final day in the office for 2024 - while the South Coast line was shut completely amid the government's wage dispute with train workers.
Unions continue to demand four annual wage increases of eight per cent, which Premier Chris Minns has said is unaffordable and could not occur while he is denying nurses a similar claim.
The government previously offered 11 per cent across three years, including superannuation increases.
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