Gladys Berejiklian has admitted she should have locked down Sydney earlier as NSW recorded another 239 cases of Covid-19.
In a press conference on Thursday after the record infection increase, the premier was asked: 'Will you admit that your strategy has failed, that you have failed?
'You said the settings were right. That's not true and National Cabinet is going to decide a short, sharp, hard lockdown was the way.
'Can you see now that you made a mistake there? And the strategy is failing.'
After a pause in which she appeared shaken by the question and perhaps close to tears, the crestfallen premier replied: 'Well, we have harsher restrictions in place than any other state has ever had.'
She described the highly contagious Delta strain as a 'game-changer' and later said: 'I'm never going to suggest we get everything right.'
Ms Berejiklian has faced criticism for refusing to impose lockdown until June 25, nine days after Sydney's outbreak began on June 16.
Other states have shown that locking down 'hard and early' can snuff out the virus and reduce the length of the shutdown.
Victoria has just removed restrictions after a two-week lockdown and South Australia has released residents from a one-week shutdown.
'I don't think any government around the world can say they get everything right because there's no rulebook,' Ms Berejiklian said.
'I'm the first one to admit at every stage of the process in the last 18 months, with the benefit of hindsight it would be wonderful to know the alternative course. We'll never know that.'
An emotional Gladys Berejiklian admitted she should have locked down Sydney earlier as NSW recorded another 239 cases of Covid-19
On July 9, Mr Morrison announced a four stage plan to get Australia back to normal, with each step to be triggered when the vaccination rate hits a certain percentage
Prime Minister Scott Morrison originally backed Ms Berejiklian when she refused to lockdown in June - but he now says locking down hard and early over just a few cases is the best move to combat the highly infectious Delta strain.
'It is clear that the best response in these circumstances with the Delta variant is that approach. I think that is fairly obvious,' he said on Wednesday.
'There is a clear learning here, and that is the approach that I would expect states would follow in the future.'
Sydney's lockdown has been extended until at least 27 August as cases continue to rise.
The city's 239 new local cases is a higher figure than NSW's previous daily record of 212 on March 28, 2020.
On Thursday 70 of the new locally-acquired cases - which were found from a NSW pandemic-record 110,962 tests overnight - were infectious in the community.
NSW Health also confirmed the death of another two of the state's residents from Covid-19 - a woman in her 90s and a man in his 80s from south-western Sydney.
Pictured: Police patrol Bondi Beach during lockdown which has been extended throughout August
Neither of them were vaccinated against the virus. NSW Chief Health Officer Dr Kerry Chant said 25 per cent of the state's residents over the age of 70 had yet to receive their first dose of a Covid-19 vaccine.
There are now 182 patients suffering from the virus in hospitals across the state - 54 of whom are in intensive care and 22 are on a ventilator.
Just a day after extending the city's stay-at-home lockdown for another four weeks, Ms Berejiklian also announced two million Sydney residents living in one of eight hotspot LGAs in the west and south-western suburbs would have to wear a mask whenever they leave home.
'If you step foot outside your household, you need to wear a mask at all times. It doesn't matter where it is,' she said.
'We're seeing too much evidence of people who are not wearing masks when they need to.'
Penalties for not wearing a face mask across the state meanwhile will increase from $200 to $500.
From midnight on Saturday morning, residents in those LGAs also cannot travel more than 5km from their home for essential shopping or for exercise.
What are the four phases of opening up?
On July 9, Mr Morrison announced a four stage plan to get Australia back to normal, with each step to be triggered when the vaccination rate hits a certain percentage.
The vaccination percentages required are being calculated by modelling experts at The Peter Doherty Institute for Infection and Immunity and will be released at the end of July.
1. Vaccinate, prepare and pilot (from July 14)
Arrival caps cut in half to 3,035 a week; lockdowns and state border closures as a last resort; trials of seven-day home quarantine for vaccinated arrivals; medicare vaccination certificates available on apps like apple wallet
2. Post vaccination phase (when an as-yet unannounced percentage of Aussies are jabbed, expected early next year)
No lockdowns or state borders except for 'extreme circumstances'; caps for unvaccinated arrivals doubled to 6,070; home quarantine for vaccinated arrivals; capped entry for students and economic visa holders
3. Consolidation phase (date not announced)
Lifting all restrictions for outbound travel for vaccinated travellers; no caps for vaccinated arrivals; vaccinated people exempted from domestic restrictions; increased caps for students and visa holders; more travel bubbles being set up with countries such as Singapore; booster shots rolled out
4. Final phase (date not announced)
Uncapped arrivals for vaccinated people without any quarantine and uncapped arrivals for unvaccinated people with testing before departure and on arrival