[1] Set in the 1970s and 1980s in Sydney, the miniseries concerns the relationship between controversial former detective Roger "the Dodger" Rogerson and notorious criminal Arthur "Neddy" Smith.
Blue Murder is narrated by the characters of Rogerson, Smith, and Drury, and focuses on the corruption allegations that plagued the NSW Police Force at the time.
In gratitude, Rogerson and his colleagues award Smith a "green light", permitting him to commit crimes in Sydney with full police protection and, at times, assistance.
He receives a tip from an informant that a Melbourne-based drug dealer, Alan Williams (Marcus Graham), has a large quantity of heroin to sell.
As the transaction is about to be completed, members of the Victoria Police, who are assisting Drury with surveillance, break cover prematurely and attempt to apprehend Williams, who escapes after a lengthy chase.
Feeling mistreated by his superiors, he deepens his connections with the criminal world, becoming acquainted with hitman Chris Flannery (Gary Sweet), who is a friend of Alan Williams, and becomes proactive in the Drury-Williams case.
Williams is determined not to go back to prison, and makes it clear that he is prepared to pay any price to ensure Drury is unable to testify.
Macdonald prevents any questioning of Rogerson from taking place, and subjects Drury, still in intensive care, to a heavy-handed and intimidating interrogation.
Although Drury does not back down from his accusations, Macdonald publicly displays his faith in Rogerson's innocence by bringing him to an official police dinner, to which all other invitees have brought their spouses.
One of these associates, Tony Eustace (Marshall Napier), faces legal troubles and is consequently compelled to inform against Flannery to Kerrison.
Porter proposes that they argue that Drury, as an undercover officer, is skilled in the art of deception, and thereby raise the issue of whether his testimony can be trusted.
However, after the trial, Alan Williams confesses his involvement in the Drury shooting to Kerrison, and the Federal investigators continue to build their case against Rogerson.
After Sallie-Anne Huckstepp obtains tapes that implicate members of the NSW Police, Smith drowns her in a lake to prevent the evidence from surfacing.
Afterward, Smith is involved in a drunken traffic altercation during which Glen Flack, played by David Franklin, stabs a motorist to death.
Smith concludes that Rogerson had, after all, been behind the attempt on his life, but he realises this was just the nature of the lives they led, and he feels no resentment towards his long-time friend.
An updated epilogue in the 2001 broadcast and subsequent DVD releases also reveals that Michael Drury retired from the NSW Police in 2000, and that Neddy Smith was acquitted of the murder of Sallie-Anne Huckstepp, which remains unsolved.
* Footage of Ray Martin used in the miniseries was taken from his TV interviews with the real Sallie-Anne Huckstepp (taken from 60 Minutes in 1981) and Roger Rogerson (taken from Willesee in 1986).
An injunction brought during Arthur "Neddy" Smith's appeal against his life sentence saw its broadcast delayed in New South Wales and the Australian Capital Territory for six years, until 2001.