LNP suggests Palmer choose between business and political interests

BILLIONAIRE businessman Clive Palmer is rethinking his involvement in Queensland's Liberal National Party.

BILLIONAIRE businessman Clive Palmer is rethinking his involvement in Queensland's Liberal National Party after it moved to gag him from speaking out against Campbell Newman's state government.

Bob Katter's Australian Party immediately seized on the rift to invite Mr Palmer to discuss their "common interests".

LNP acting president Gary Spence yesterday put the outspoken mining plutocrat on notice over his attacks on Mr Newman and his team, saying: "The party can't allow such a public conflict involving one of its members to continue."

If the dispute continued, Mr Palmer would have to choose between his business activities and his membership of the LNP, he said.

"Our party acknowledges the rights of individuals and organisations to put their case to government but the dilemma for Professor Palmer is that situations like the one in which he finds himself bring him into conflict with the constitution of the party," Mr Spence said in a statement.

"Professor Palmer is a strong and loyal LNP supporter and so it is with a degree of sadness that we find ourselves in this position. However, our duty to the LNP is clearly set out in the party's constitution, which has to be applied without favour or affection."

Mr Palmer hit back, via Twitter, to say he would consider his position over the weekend. But a source close to him was adamant that he would not quit the LNP, of which he is a life member.

Relations between Mr Palmer and Mr Newman soured when the state government snubbed his plan to open up a rail corridor to the Galilee Basin in central west Queensland, where he is developing a massive coalmine, and gave the nod to rival Gina Rinehart.

Mr Palmer is also at odds with the state government over his proposal to pump wastewater from his Yabulu nickel plant into a bay inside the Great Barrier Reef protection zone. Angered by Mr Newman's heavy public service cuts, he said recently he would give $250,000 to a union to help the displaced workers.

Yesterday, he stepped up his criticism of the state government's inaugural budget, which slugged coalminers with a royalty increase of up to 50 per cent for high-value coking ore, telling shareholders of his company Waratah Coal that the approach was arrogant and ill-conceived. "The ramifications for the state economy are frightening and a continued downturn looks inevitable unless the hike in coal royalties is abandoned," Mr Palmer said.

Senior Queensland and federal figures are agitating for action against Mr Palmer after repeated highly critical comments, including his declarations this week that Mr Newman was "good at putting people out of work" and had "no experience in business".

Some complained the LNP should have acted more forcefully, contrasting it with the party's expulsion of former Howard government minister Gary Hardgrave. He was kicked out in June for "bringing the party into disrepute" over comments he made as a broadcaster during the Queensland election campaign.

Mr Newman would not discuss the matter: "My focus is absolutely on getting the state back on track."