The New South Wales government is moving to introduce new laws that will allow it to break up the unofficial 'tent city' that has sprung up in Martin Place, only a stone's throw from the hallowed halls of state parliament.

The new laws will allow the state government to remove people from Crown Land within the City of Sydney if they are conducting "unauthorised activity" or compromising public safety.

Premier Gladys Berejiklian also said last night that she has secured, and will fund, places for residents to sleep at The Wayside Chapel in nearby Potts Point, although that arrangement has been questioned today by Reverend Ted Noffs.

Earlier in the week, a plan announced by Sydney Lord Mayor Clover Moore, fell apart soon after it was announced, with the homeless community refusing to move on until they were provided with a hall large enough for communal sleeping.

Last week, plans to move the community on were also unsuccessful after residents weren't offered a place to sleep.

Moore has responded to the Premier's announcement of new laws, saying her move to change the law is "potentially setting up the risk of violent conflicts between police and vulnerable homeless people as we saw in Melbourne."

The laws are expected to be ready for application by Friday.

Tent city's unofficial 'Lord Mayor', Lanz Priestly, told The Daily Telegraph he had not yet decided how he would respond to the news, but would consult with other residents.

The homeless camp, or 'tent city' as it has become known, is a loose collection of around 40 tents that are erected each night, and has become home to dozens of rough sleepers. Kitchen facilities have even evolved from the camp.

But uncertainty still surrounds the camp, with several question marks still hanging over the latest announcements, the key question being, who is responsible?

Read more about homelessness in Australia:

Victorian government launches small home initiative to help homeless

Real estate agents raise $133,000 sleeping rough

Train carriages could be converted to shelter for the homeless