RELATIONS between the federal government and Rob Oakeshott have turned poisonous after a senior cabinet minister initiated legal action against the NSW independent MP concerning comments he made about the mining tax.
Mr Oakeshott has been threatened legally by the Minister for Resources and Energy, Martin Ferguson, after comments Mr Oakeshott made to The Sydney Morning Herald 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 and Mr Ferguson in his job, 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 on Friday.
''Yes, I'm surprised that the cabinet and the caucus could be so stupid.''
Mr Oakeshott is furious at Mr Ferguson's 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's position as a federal MP does not cover him legally and he would be personally liable for all expenses and any damages that may be awarded.
The civil case against the former speaker Peter Slipper, who faces sexual harassment claims, has exposed fears in Parliament that only government frontbenchers are covered by taxpayers against legal action.
The Herald has received a similar letter from Mr Ferguson's lawyers threatening similar action after Mr Oakeshott's comments were reported in the paper on Friday last week and on the website smh.com.au.
Mr Ferguson played a pivotal role in renegotiating the mining tax with the big minerals companies after Kevin Rudd was ditched as prime minister in June 2010 and his Resources Super Profits Tax radically altered into the Minerals Resources Rent Tax.
Mr Oakeshott supports taking the MRRT back to Parliament after reports it would make no revenue in its first three months. The government claimed the revenue shortfall was due to a slump in commodity prices while its detractors blamed generous deductions the miners can claim against their MRRT liability.
Mr Oakeshott questioned the deductions and Mr Ferguson's role during negotiations.
Mr Ferguson's lawyers contend this to be ''false, defamatory and indefensible under defamation law''.
The legal threat came as broader tensions emerged between the government and the two key independents, Mr Oakeshott and Tony Windsor.
On Thursday, they met with the Prime Minister, Julia Gillard, and the Treasurer, Wayne Swan, urging them to stop rushing legislation and playing politics with key policies, while assuming the independents would be supportive. They told the government it risked losing their vote on savings measures in the midyear budget update, as well as broader polices including the newly revised Murray-Darling Basin Plan.