The Coalition is poised to block Labor’s heavy emissions cap-and-trade scheme, forcing the government to cut a deal with the Greens who are positioning themselves to derail the use of carbon offsets by new coal and gas giants.

It is understood a meeting of the shadow cabinet on Tuesday will result in a rejection of the Safeguard Mechanism crediting legislation, which Labor wants to pass into law by the end of March to give business time to prepare for the change by July 1.