Federal Politics

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Oakeshott furious at legal action

RELATIONS between the federal government and Rob Oakeshott have turned poisonous after a senior cabinet minister initiated legal action against the Independent MP concerning comments he made about the mining tax.

Mr Oakeshott has been threatened legally by the Minister for Resources and Energy, Victorian Martin Ferguson, following comments made last week after it was revealed the mining tax would make next to no revenue in its first three months. Mr Oakeshott, whose support is vital to keeping Labor in power, has reacted angrily to the legal letter, which he received on Thursday, describing it as ''stupid''.

''I can confirm I have received defamation proceedings from cabinet minister Ferguson,'' he said. ''Yes, I'm surprised that the cabinet and the caucus could be so stupid.''

Mr Oakeshott is furious at the legal action, given all he has endured for putting Labor in power and keeping it there. He is battling to keep his seat of Lyne at next year's election.

Mr Ferguson is demanding from Mr Oakeshott a private written apology and is reserving his right to go further ''to protect his rights and to seek compensation for the damage which he has suffered, including the commencement of defamation proceedings in the Supreme Court of NSW''.

Mr Oakeshott would be personally liable for all expenses and any damages awarded.

Mr Oakeshott queried the deductions available to miners to claim against their MRRT liability and Mr Ferguson's role during negotiations with mining companies over the tax.

Mr Ferguson's lawyers contend this to be ''false, defamatory and indefensible under defamation law''.