Both men have been charged with misconduct in public office over alleged deals dating back to when they held senior positions in the former NSW Labor Government.

Following an investigation by the Independent Commission Against Corruption Mr Obeid was charged over leases relating to properties in which he held an interest at Sydney’s Circular Quay district.

Mr Obeid faced Downing Centre local court in Sydney this morning over allegations he caused “the Maritime Authority of NSW to deal favourably with Circular Quay Restaurants Pty Ltd, a company of which his family was the effective owner, regarding the company’s restaurant

tenancies at Circular Quay.”

A court attendance notice says that in 2007 Obeid did “wilfully misconduct himself” by inducing a senior officer at the Maritime Authority of NSW Steve Dunn to deal favourably with his company.

It emerged this morning that the DPP key witness against Mr Obeid will be former Maritime Authority boss Mr Dunn, who was also found to be corrupt in the ICAC investigation.

However Mr Obeid had an early win this morning when Magistrate Christopher O’Brien rejected an application by the DPP to impose bail conditions on the former NSW Labor MP.

Magistrate O’Brien said Mr Obeid posed “no flight risk” or and “no risk to the community” and cited connections to the community through his nine children and 31 grandchildren.

The DPP prosecutor Daniel Noel this morning made an application for bail conditions against Mr Obeid, including surrendering his passport, staying away from points of international departure and not approaching witnesses.

Mr Noel cited reports of Mr Obeid’s Hunters Hill home being for sale, his regular contact with his ancestral village in Lebanon and his duel Australian/Lebanese citizenship.

Mr Noel also stated that the “case against the accused is strong” relying on evidence from Mr Dunn in the ICAC and “much of the case rests against documentary evidence.”

Mr Obeid’s barrister John Stratton opposed any bail conditions, pointing out many of the witnesses were Mr Obeid’s oldest friends and associates including his brother-in-law and former NSW Labor MPs Michael Costa, Eric Roozendaal and Joe Tripodi.

Mr Stratton also said it was untrue that Mr Obeid’s home was for sale, and there was no issue of Mr Obeid’s Lebanese citizenship.

In making his decision the Magistrate also pointed to the remarks by former NSW Supreme Court Judge Justice Anthony Whealy, who presided over Mr Obeid’s ICAC hearing into the Circular Quay leases.

While finding Mr Obeid corrupt, Justice Whealy did not recommend the DPP press ahead with charges because “of a lack of admissible evidence on which to place a prosecution.”

While accepting the DPP “has a different view”, Magistrate O’Brien said he “could not ignore” the views of Justice Whealy, accordingly he said “the law requires this application be refused.”

Mr Obeid will now be released on unconditional bail with a reappearance on February 19.

Mr Obeid has previously dared the DPP to charge him, saying he would welcome the chance to clear his name in a court.

Outside court Mr Obeid welcomed the court’s initial decision and said he would “endeavour to clear my name is future court proceedings.” Walking away, Mr Obeid added: “it was all a joke.”

Magistrate Christopher O’Brien is still considering the matter and will make a decision after midday today.

The charges follow similar corruption charges against former Labor minister Ian Macdonald for granting a coal lease to former mining union boss John Maitland.

Mr Macdonald and Mr Maitland appeared in court this morning both on charges of misconduct in public and an accessory to misconduct in public office.

It is alleged that Mr Macdonald granted the coal licence to benefit his former political and union ally Mr Maitland.

Bail conditions were imposed against Mr Macdonald to surrender his passport and stay away from points of international departure.

Mr Macdonald said outside of court he was looking forward to defending the charges.

The ICAC is still waiting to hear whether the DPP will charge Mr Obeid over the coal leases granted by Mr Macdonald which caused Mr Obeid’s family to get a $30 million windfall profit.