Federal Resources Minister Matt Canavan has been branded "unhinged" after he accused Queensland's Labor government of racism and xenophobia over the Adani coal mine.
Senator Canavan has told The Courier-Mail the project is on a "knife-edge" after Queensland Premier Annastacia Palaszczuk said she'd veto a taxpayer-funded loan sought by the Indian miner to build a rail link to get coal to the coast.
He says Labor has a history of xenophobia and racism and a British company wouldn't have faced the same opposition as Adani.
"The Labor party has a long and colourful history of xenophobia and racism and this is just the latest chapter in that book," Senator Canavan said.
"If it was a British company building this rail line, or the Australian government building the rail line, I don't think we would have the controversy it has attracted. It's down to that it is an Indian company."
A spokesperson for federal Labor leader Bill Shorten hit back saying: "Matt is clearly unhinged and lashing out."
In vowing to veto any loan from the federal Northern Australian Infrastructure Facility, Ms Palaszczuk said she was sticking to her guns about no taxpayer funds going to the project.
She has said it must stack up independently, without financial assistance from Australian taxpayers.
Funding for Adani's project is yet to be secured, with cash from Chinese banks looking increasingly less likely.
Former Labor foreign minister Bob Carr has been working with the Australian Conservation Foundation to lobby Chinese political and financial leaders not to put money into the project.
On Wednesday, Mr Carr said the Chinese embassy in Australia had confirmed that no Chinese banking institution had made funding commitments to Adani.
He also said early negotiations with the one entity were terminated "due to the absence of commercial feasibility".
On Wednesday, Environmental Justice Australia wrote to the Australian Competition and Consumer Commission asking it to investigate alleged "misleading or deceptive conduct" by Adani about how many jobs the mine project would create.
"Plenty of evidence suggests Adani's representations about 10,000 direct and indirect jobs are seriously flawed, yet the company continues to mislead people looking for work," the EJA said, noting the Queensland Land Court had already ruled the mine would create just 1,464 jobs.