The KAP's state leader said staffers only found out they no longer had jobs when they received a media release from the state government following Ms Palaszczuk's speech at the Labor State Conference on Sunday.

He labelled the Premier's denunciation of his party and Senator Anning's inflammatory speech "mock outrage".

"How is this fair? This was not a review because of the Premier's outrage, this was political opportunism at its worst," he said.

"She [Palaszczuk] has taken the opportunity to sensationalise a federal issue and use mock outrage so they can precipitate these events.

"If they want to poke the bear, go ahead. It hasn't worked out for you this far."

Mr Katter and his father, federal MP Bob Katter, backed Senator Anning after his inflammatory speech, which praised the former White Australia policy, advocated a ban on Muslim immigration and suggested a plebiscite as the "final solution to the immigration problem".

Nazis referred to the extermination of the Jewish people in Europe and beyond as "the final solution to the Jewish question", although Senator Anning later said he was not aware of this.

The Premier said her grandparents had fled from the Nazis during World War II to come to Australia and she would not stand for the senator's comments.

“Because Senator Anning’s party won’t denounce him, I denounce his party,” she said.

Ms Palaszczuk announced Labor would tear up the additional staff deal with KAP "because [KAP] tolerates the intolerable and defends the indefensible."

Mr Katter said the Premier's decision showed that despite having only three MPs in Parliament, Labor considered KAP a serious threat.

KAP has previously been described as having five extra staffers than it would normally be allocated but Mr Katter appeared to say it would only lose four workers, three parliamentary staff and one electorate officer.

That would leave them with only three electorate officers on their staff, according to Mr Katter.

The Member for Traeger blamed the LNP and Labor because he said the Premier was responding to calls from the state opposition to take action against Queensland KAP MPs over Senator Anning's comments in federal Parliament.

"We’ll do what we always do. We're constantly attacked by the major parties, but there is growing discontent for the bullying of the major parties," he said.

"This is a clear example of both sides combining to try and get rid of an alternate view in Parliament.

"They're constantly trying to cut us off at the knees, but we keep coming back stronger."

Mr Katter blamed "misinterpretation" of the Queensland senator's comments during his maiden speech in Canberra for the reaction, as well as "hypocrisy" among senators.

"Half of the senators were shaking his hand and hugging him afterwards, until the next day when they changed their view," he said.

The Palaszczuk government relied on the KAP's two votes during the last term of government when Labor was in minority and their close working relationship continued into another term, when the minor party added a third seat at the 2017 election.

Mr Katter said he would investigate the legalities of Ms Palaszczuk's decision.