Federal MP Clive Palmer says he is willing to vote against budget bills to block the Federal Government's Direct Action climate change policy.
However, Labor says it will not support him, ruling out the possibility of it triggering a double dissolution election.
The Palmer United Party leader says Direct Action, which includes a $3 billion fund to pay polluters to voluntarily reduce their emissions, is a "token gesture", and the funds would be better spent on the age pension.
The Government says it will tie Direct Action's emissions reduction fund to next month's budget bills.
But Mr Palmer says he would be prepared to vote against the legislation.
"We'll be voting against Direct Action, whatever form it's in," he said.
"If that's what the Government wants, they can call a double dissolution [election]."
Earlier Environment Minister Greg Hunt brushed off Mr Palmer's threats, saying: "The funds will be part of the budget papers and I doubt the budget will be blocked, unless we're going to be forced into a constitutional issue".
"We were elected by the Australian people to repeal the tax, and clean up our air, clean up our land and reduce our emissions. That goal is clear and unwavering," he told ABC News Breakfast.
"We will achieve those targets. We are committed to those targets."
Mr Palmer's Palmer United Party is likely to hold the balance of power when the new Senate sits from July this year.