Family First senator Steve Fielding is not backing away from his decision to scuttle the government's tax hike on alcopops.
But he said there was nothing stopping the government from proceeding with the measures to tackle binge drinking it had negotiated with the Senate crossbench.
The government has collected nearly $300 million from the 70 per cent tax hike on ready-to-drink alcoholic beverages it imposed by regulation in May last year.
"What has has happened is that they have hidden behind a tax grab for 11 months, conning Australia and at the 11th hour they have put a few measures in place," Senator Fielding told reporters.
The Family First senator says binge drinking is not a tax problem.
"It's a culture problem and breaking the back and the link between alcohol and sport is absolutely critical for all Australian families."
The government on Wednesday rejected Senator Fielding's "lifeline" amendment to ban alcohol advertising during sports telecasts from 2012.
Opposition health spokesman Peter Dutton says the government should immediately introduce legislation to prevent the revenue being returned to the liquor industry.
"It would be a disgrace if (prime minister) Kevin Rudd for political reasons decided to give that money back," Mr Dutton told reporters.
The government had the power to retain the money provided the legislation was passed by Friday.
"The legal advice is very clear ... the government ... has to validate it this sitting period ... so the money doesn't have to go back."
Labor backbencher Darren Cheeseman says the government wanted to ensure the price of alcopops was kept high.
The price of ready-to-drinks is expected to drop by up to $1.30 after the tax hike ceases.
"They (the opposition) are trying to do a big favour for the big distillers in this industry and it's not acceptable," he told reporters.
Australian Greens leader Bob Brown says the coalition is as much to blame as Senator Fielding for the legislation failing.
"All of them made a muck-up of a perfectly straight forward measure and have dismissed an extremely good array of measures to combat alcoholism," he told reporters.
Senator Brown said the government now needed to move speedily to introduce legislation on Thursday to ensure the collected tax gained was not returned to the distillers.
Independent Senator Nick Xenophon said Senator Fielding should have folded on Wednesday and accepted a very comprehensive package of measures which would have shifted the culture of binge drinking.
"My plea to Steve Fielding is to reconsider his position," he said.
Labor Senator Doug Cameron said the opposition and Senator Fielding's sinking of this measure was absolutely ridiculous.
"Every health professional who has commented on this has said clearly that this was an outrageous proposition," he said.
Liberal frontbencher Andrew Robb said the hike was just a tax, adding it was a money grab by Labor.
"It had nothing to do with binge drinking, nothing to do with young men who are the major problem with binge drinking," he told reporters.