Just after 7pm last Sunday, former private schoolgirl and daughter of a Labor legend Harriet Wran was captured on CCTV footage walking through the lobby of a rundown housing commission block in Redfern.

The pretty 26-year-old took the stairs to level one, accompanied by two older men – her boyfriend of only two weeks, Michael Lee, and an alleged accomplice, Lloyd Haines.

This was no social call. Mr Lee and Mr Haines had come to confront Daniel McNulty over a previously botched drug deal. And Ms Wran was "desperate" for another hit.

In Mr Lee's possession, according to a police statement of facts, were two knives in a satchel, one "as long as Lee's forearm", while Mr Haines carried a metal stonemason's hammer.

Ms Wran reached the door of B30, raised her hand and knocked. Mr McNulty answered. A violent melee broke out, at the end of which Mr McNulty lay dead or dying from stab wounds on the floor, while another man who had been inside the apartment, Brett Fitzgerald, fled onto the street bleeding heavily from the neck.

Four days later, Ms Wran sat huddled in a police lock-up dressed in police-issue forensic overalls facing murder and attempted murder charges.

Neville Wran once famously said that Balmain boys don't cry. But if the former NSW Labor premier had lived to see this day, it is hard to imagine he would not be shedding copious tears for his damaged youngest daughter.

Harriet was born in 1988 when Wran was 61, the oldest of two children he had with his second wife, the former Qantas executive Jill Hickson. The couple also had a son, Hugo, born three years after Harriet and Mr Wran had a son and daughter from his first marriage, Kim, now 59, and Glenn, 67.

The two sets of children were more than a generation apart – a factor that would fuel the explosive tensions that erupted inside the family as Mr Wran entered his twilight years.

Harriet, although always a handful from early in childhood, was adored by Mr Wran, who lavished love and money on her, would often pick her up from school or other appointments and make her dinner.

She attended two of Sydney's most prestigious private girls' schools, Ascham and SCEGGS Darlinghurst, and for a for a short time was a student at Sydney University.

But, from her early 20s, it was clear alcohol and drugs were becoming a recurrent problem.

One family friend said Ms Wran was in and out of rehabilitation clinics half a dozen times and suffered from anorexia.

Another recalled her once having stitches on both arms from an act of self-harm. Her father would settle the debts she racked up from online gambling, according to a close family friend.

She would often disappear for weeks, leaving her father desperate to know her whereabouts. At one stage, she told Mr Wran she needed cash to pay off bikies who had abducted her. A payment was arranged, one source said. But Mr Wran was beside himself with worry.

"He was crying every night, he couldn't sleep ... he would call police trying to find out where she was," the source said.

In 2012, she was living in a rented granny flat in Hunters Hill that she shared with another man. Although she paid only $100 a week in rent, she would dress in expensive fur coats and, according to a local resident, looked like "someone you would expect to see in Double Bay".

The landlord said that Ms Wran rarely left the flat and said she was receiving Centrelink benefits. Large groups of men would show up at all times of the day and night.

Three months after she moved in, the owners of the property noticed police in their garden. The man Ms Wran was living with was arrested. When the landlord inspected the granny flat, he was shocked at what he found. He described it as a "crack den" with pipes, cartons of cigarettes and dirty dishes and clothes everywhere.

When police picked Ms Wran up on Wednesday afternoon at Liverpool railway station, she was still wearing the clothes she had been in at the time of Mr McNulty's murder. She had not slept for days and was carrying no cash, cards or ID.

Although she had been sleeping rough for some weeks, it would not have been for lack of resources.

When Mr Wran died in April this year, aged 87, he left an estate worth about $40 million, including a luxury apartment in Crown Street, Woolloomooloo, which was left jointly to Hugo and Harriet.

Mr Wran was given a state funeral, attended by hundreds. But behind the legend of Wran the wily politician, brilliant QC and successful investment banker lay an, at times, turbulent home life. Neighbours complained of frequent disturbances at the family home in Wallis Street, Woollahra, and, for the last seven years of his life, there were periodic separations from Jill.

In 2011, deep-seated antipathies came to the surface when Mr Wran moved out of the house and into the Toaster building at Circular Quay, appointing his older daughter, Kim, his business partner, Albert Wong, and his friend Malcolm Turnbull his guardians.

At the end of that year, Neville and Jill Wran reconciled and she agreed he could move back to the family home on the basis that guardianship of his affairs returned to her. But, within three months, he had moved to Lulworth nursing home in Potts Point, where he remained until his death.

"He was torn," said a former adviser on Thursday. "Home life was not so happy but he did not want a divorce, did not want to be on the front page of the paper."

The family friend said Mr Wran had adored all his children but it had not been easy with the younger ones, to whom he had given everything they wanted.

"When a person is in their 70s and 80s, it's hard to have teen children and behave like a father," the friend said. "It's all very sad."