The ACT Labor Party is accusing the ACT Liberals of making a ''dirty'' preference deal with the Rise Up Australia Party.
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However, the Liberals rubbished the claim as Labor put the same party ahead of the Coalition on its how-to-vote card.
The founder of the anti-Islam Rise Up Australia, Daniel Nalliah, led a prayer campaign in 2009 against what he called a ''satanist'' black mass site on Mount Ainslie.
For the election, the party is campaigning under the theme, ''Keep Australia Australian''.
Mr Nalliah denies the party is racist, saying it has a multi-ethnic policy for Australia.
On Wednesday, the party's website featured a Fairfax Media story that said the Liberal Party had preferenced Rise Up Australia ahead of Labor and the Greens in the Victorian Senate race.
ACT Labor Party secretary Elias Hallaj commented on the issue on Twitter: ''I'm referring to ACT Liberals benefiting from the dirty preference deal they arranged with Rise Up racists.''
Later Mr Hallaj said in a statement: ''It was really disappointing to see that the Liberals have exchanged preferences with Rise Up Australia. It's disappointing to me to see any mainstream party benefiting from this fringe group.''
A Liberal spokeswoman said: ''The Labor Party in the ACT preferenced Rise Up above the Canberra Liberals. We preferenced Rise Up above the Labor Party."
The Australian Electoral Commission has published the preference arrangements of parties contesting the election.
For the ACT Senate race, Labor has put Rise Up Australia at positions 24 and 25, just ahead of the Liberals in last place.
Rise Up Australia puts the Liberal Party at seventh and eighth position, and Labor at 17 and 18.
The Liberal how-to-vote card puts Rise Up Australia at 10 and 11, ahead of Labor at 24 and 25 and the Greens last, at 26 and 27.
After Victoria's Black Saturday bushfires, in which 173 died on February 7, 2009, , it was widely reported Mr Nalliah claimed he had received ''prophetic dreams'' that the fires were a ''consequence'' of the state's decriminalisation of abortion.
Former federal treasurer Peter Costello at the time described Mr Nalliah's assertion the bushfires were divine retribution for the state's abortion laws as ''beyond the bounds of decency''.
Mr Nalliah wrote a blog entry in 2009 on the Catch the Fire ministries' website suggesting red stains on concrete at the top of Mount Ainslie were evidence of animal sacrifices by a coven of witches.
He called on Christians to launch a ''spiritual warfare attack''' on Canberra's ''demonic strongholds'' from the top of Mount Ainslie.
