Four Nationals and possibly a Liberal will cross the floor of the Senate next week to back a Greens-sponsored disallowance motion over tax breaks for carbon sinks.
The move will defy Opposition Leader Malcolm Turnbull who spoke strongly in support of the tax break at a joint party meeting of all Coalition MPs yesterday.
Most Coalition members fell in behind Mr Turnbull at the meeting, but the five senators spoke actively against the tax credit.
Senator Barnaby Joyce yesterday confirmed the willingness of himself and fellow National senators Fiona Nash, John Williams and Ron Boswell to cross the floor on the issue.
Liberal senator Bill Heffernan also spoke against the tax break during the meeting, but last night he did not indicate whether he would be prepared to cross the floor.
Greens senator Christine Milne will move the motion to repeal the carbon sink tax legislation, which provides an up-front tax break to companies that grow large plantations to offset carbon emissions.
Senator Milne was to put the bill to the Senate today, but said she had delayed the motion until next week at the request of Senator Heffernan to allow him time to persuade the Coalition to change its position.
Senator Milne said the tax break for carbon sinks was "buried" in taxation legislation passed through the Senate in June, and was missed by the Greens and Nationals.
A disallowance bill can remove the tax deduction as it is based on guidelines that can be overturned by a majority of the Senate or House or Representatives.
But that is unlikely unless Mr Heffernan can persuade the party room to change its stance, and independent senator Nick Xenophon and Family First's Steve Fielding vote for the motion.
That means the renegade Nationals' threat to cross the floor is largely symbolic.
Tax breaks for carbon sinks were first mooted under the Howard government by treasurer Peter Costello, with the strong support of then environment minister Turnbull.
But that legislation was never implemented after complaints by the Nationals last year.
Senator Milne said she opposed the tax break because the carbon sinks were missing a number of ecological conditions wanted by the Greens.
"I'm very disappointed that Peter Costello's legislation has been adapted by the (Rudd) Government," she said.
Senator Joyce said the four Nationals opposed carbon sinks because they could financially assist big companies to squeeze small farmers off arable land.
"Essentially they (carbon sinks) will become managed investment schemes on steroids."
Senator Milne said she had been in discussions with Climate Change Minister Penny Wong's office until last Friday, and some concessions had been offered, including monitoring sinks' groundwater use, but that had not satisfied the Greens.