Paul Toole faces likely challenge as NSW Nationals leader from Dugald Saunders

Paul Toole may be challenged by Dugald Saunders at the party's post-election meeting. (ABC News)

Paul Toole may be challenged for the position of NSW Nationals leader tomorrow, when the party meets for the first time since last month's election, in which it failed to make any ground. 

The ABC understands that former agriculture minister Dugald Saunders will nominate for the position when the party opens the ballot for leader.

The Nationals lost one seat at the election, the southern NSW seat of Monaro, which returned to Labor's Steve Whan.

The party also failed to gain back the previously held seats of Orange, Barwon and Murray, which were all retained by independents.

Mr Toole has been leader of the party since 2021, following the resignation of John Barilaro.

Party may vote to 'turn ship around'

Coffs Harbour Nationals MP and party whip Gurmesh Singh said he was aware Mr Saunders was interested in the top job.

Coff Harbour MP and National party whip Gurmesh Singh. (ABC Coff Coast: Claudia Jambor)

He said the party would decide if Mr Toole's leadership should be reviewed now that the Nationals were in opposition.

"You [can't] turn a ship around very quickly and easily, so whatever direction we set now will be the direction that we'll go in and we want to make sure we're going in the right direction," he said.

Mr Singh, who is entering his second term in parliament, said he would not be putting his name into the mix for the leadership.

"Maybe next time … you still need the numbers and that's something I'll work towards in the future, but this time around I'm happy to let others have a go," he said.

Who is Dugald Saunders?

Mr Saunders is a former radio host with commercial networks and the ABC. In 2019, he stood for the seat of Dubbo, replacing former Nationals leader Troy Grant.

The former radio host has been in parliament since 2019 and a minister since 2021. (ABC Western Plains: Kenji Sato)

Mr Saunders won the seat by a small margin four years ago, but extended his lead in the 2023 election.

In 2021, he was appointed minister for agriculture by Mr Toole, replacing New England MP Adam Marshall and also was appointed the minister for Western NSW.

He faced some controversy in the most recent election, where a banner with his election material was deemed to be in breach of local council guidelines.

The party will meet tomorrow, where all leadership positions are declared vacant following a state election.