The federal Labor Party could lose the support of its largest financial donor for the federal election.
The powerful Construction Forestry Energy and Mining Union (CFMEU), which has donated more than $9 million to Labor in the past 12 years, says it has not yet decided if it will contribute cash or support to Julia Gillard's re-election campaign.
But The Canberra Times understands that at least one Labor branch has been told there will be no money from the left-wing union to help the re-election effort.
Labor's latest financial returns submitted to electoral authorities revealed the party was nearly $12 million in the red.
The CFMEU has been the largest donor to the ALP's federal branch in the past 12 years, with $3.5 million of the union's $9 million in donations to the party since 2001 going to Labor's Sydney headquarters.
But the union, which has 120,000 members and 400 full-time staff, is increasingly frustrated by the party's lack of interest in policy demands on foreign workers, the building sector's industrial relations regime, and fly-in, fly-out mining workforces.
The CFMEU wants a curb on the powers of the Fair Work Building and Construction Commission and rules to favour Australian workers over overseas employees in mining jobs.
Other sticking points between the party and the union include Labor's refusal to mandate minimum living conditions for fly-in, fly-out workers in the mining sector and requirements for builders to use Australian-produced construction materials.
CFMEU national secretary Michael O'Connor said it would not decide whether to throw its financial muscle behind the government's re-election campaign.
"We have a national executive meeting in June and that's when we will make a determination about what we're doing and what we're not doing,'' Mr O'Connor said on Friday.
"The union will be making a decision in the best interest of its members, as it always does … It is what it is.''
ALP national secretary George Wright did not respond to requests for an interview on Friday.
Since 2001, only the right-wing Shop, Distributive and Allied Employees Association has given the Labor Party more money than the construction union.
The "shoppies" gave more than $10 million to Labor's state and federal branches.
The CFMEU has supported non-Labor political causes in the past, discreetly channelling money to the Greens before the 2010 federal election