The government has warned the Fairfax MP, who will control three crucial votes in the Senate from July, risks triggering a constitutional crisis if the Palmer United Party stands in the way of the government implementing its emissions reduction policy.

Mr Palmer declared on Monday that the "direct action" policy was “dead” and told Fairfax Media that his senators would not be supporting the “hopeless” policy.

But Environment Minister Greg Hunt remained confident on Tuesday that the policy would survive as its funds were tied the budget, which he said would pass as a matter of course.

“The primary thing is of course allocation of the funds and that is what the budget process is for and I would be amazed if the opposition threatened to block the budget, I think that would be an extraordinary thing,” Mr Hunt told ABC radio on Tuesday.

Environmental advocates however said that the government would likely only be able to pass its emissions reduction fund through the budget and not other key compliance measures that form part of its overall "direct action" policy.

The last time the upper house blocked the supply of government finances was in 1975 - an act which triggered the Whitlam dismissal.

But Mr Palmer on Tuesday immediately accused Mr Hunt of “blackmail” and threatened to derail other key pieces of legislation if the government did not put its "direct action" policy to the upper house.

He said that included using his numbers to block the carbon and mining taxes, which have already been voted down once in the Senate and would only have to fail one more time to create a trigger for a double dissolution.

“I know that Greg Hunt said that he’ll link it to the budget papers but we just see that as trying to blackmail us,” Mr Palmer told ABC radio.

“If he did that, we’d have to reconsider our position on the mining tax and the carbon tax.

“I hardly think they’re going to let Greg tie it to the budget papers if they realise there’s going to be trouble overall if they do that.”

Mr Palmer also personally attacked Mr Hunt, saying he had been ''spectacularly unsuccessful'' as an environment minister.

He said Australians had voted for an independent Senate and reiterated that nothing could persuade him to change his stance, saying the only “sensible solution is just to say that the direct action is over, good-bye Greg, we don’t want to waste that money”.

“If he wants to eliminate the carbon tax and the mining tax, he’ll make sure he presents it [direct action] fairly as a bill to the Senate,” Mr Palmer said.

“If he ties it to the budget papers, it will be curtains for him.”

But Mr Hunt signalled the government was unlikely to do such a thing as it had a mandate to repeal the carbon tax and implement "direct action".

“We would prefer to have legislation but our goal is very clear that we will implement the emissions reduction fund and we will repeal the carbon tax,” he said.

Speaking to reporters in Brisbane on Tuesday, Mr Palmer said that a majority of cross bench senators in the new Senate would oppose "direct action" and signalled that Ricky Muir, from the Australian Motoring Enthusiast Party, would vote with the PUP to block the policy.

"Direct action" aims to reduce emissions largely through payments to businesses.

The government plans to spend up to $1.55 billion over the next three years on the emissions reduction fund - part of its $3.2 billion "direct action" policy. However several senior economists have questioned whether "direct action" can meet its emissions reduction target of 5 per cent by 2020 with that budget.

Climate change advocates said on Tuesday that the broader compliance requirements of direct action, including the baselines and penalties for exceeding them, would likely be lost without legislation, making an emissions reduction target of 5 per cent even more out of reach.

"Their full climate change policy will require legislation," John Connor, chief executive of The Climate Institute, said.

"It's just a cash allowance in the budget.

"That is not the full policy."

with AAP

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