Resources Minister Madeleine King has demanded the three major east coast gas producers sign a government-drafted deal that may include what some industry figures slammed as an “unworkable” and distortionary price cap mechanism to shield domestic manufacturers.

Negotiations are “fluid” and all parties are understood to be hopeful of reaching a workable agreement, sources said, but Ms King has made clear that, if they baulk at signing her Heads of Agreement this week to cover a forecast domestic shortfall next year, she will begin the process of imposing export controls.