The NSW Greens have vowed to continue championing Palestinian human rights after a Sydney council’s boycott of Israel collapsed in the face of overwhelming political pressure.

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Marrickville Council, in Sydney’s inner-west, on Tuesday night dumped its boycott of Israeli products and services after widespread criticism from the federal and state governments, business leaders and the Jewish community.

Despite the setback, Marrickville mayor Fiona Byrne on Wednesday said the sanctions had achieved some success in the face of an “avalanche” of pressure and criticism.

“Council has put the human rights of the Palestinian people on the national agenda. That’s success to me,” she said.

“This is an ethical purchasing policy. Every organisation, every individual has a right to decide, by whatever criteria, who they’ll do business with.”

NSW Greens MP John Kaye said the party’s support for the “rights” of Palestinians would not be weakened.

“The Greens were unable to sustain the boycotts, divestments and sanctions motion but our support for the rights of the Palestinian people will not weaken,” he told reporters in Sydney on Wednesday.

“We will continue to campaign in whatever way we can to make sure the world understands that the Palestinian people are being deposed and their human rights are being denied on a daily basis.”

Marrickville Council in December had voted to support a global Boycott, Divestment and Sanctions (BDS) campaign, which accuses Israel of ethnic cleansing and racial discrimination.

But the ire of ratepayers was aroused and earlier this month NSW Premier Barry O’Farrell indicated he would sack the council, telling it to refocus on delivering local services.

The issue came to a head in early April after a council report suggested the sanctions could have ended up costing taxpayers almost $4 million.

NSW Transport Minister Gladys Berejiklian on Wednesday reiterated the government’s stance, saying councillors should stick to their own patch.

“Councillors are elected to represent their community on local council issues and not these issues,” she told reporters in Sydney.

“They should stick to what they need to do. That’s the premier’s view, that’s the government’s view.”

The NSW Jewish Board of Deputies was unavailable for comment on Wednesday due to the festival of Passover, but chief executive Vic Alhadeff has previously said the boycott was “ill-conceived from the outset”.

“We would describe the reversal of the policy as a welcome victory for commonsense,” he said in a statement.

Meanwhile, the Greens-controlled Leichhardt Council has voted down a motion designed to prevent the authority ever introducing a similar boycott of Israel.

Labor councillors tried to introduce the motion at a meeting on Tuesday night and now claim it could lead to another Israeli boycott.

“Why would council have voted down that motion last night unless they were hoping that a little way down the track, when the public outcry had died down, they could slip a boycott through quietly?,” Labor councillor Darcy Byrne told AAP on Wednesday.

Leichhardt Greens councillors said they were happy with an existing policy, which is designed to promote Israeli-Palestine relations and had no plans to introduce another Israel boycott.