ANGER among National Party MPs at banks' treatment of drought-stricken farmers is creating dangerous divisions in Cabinet, threatening further instability for the Abbott government.
National Party sources have confirmed the Coalition is straining over the issue of farmers being left destitute by banks, and Nationals Whip Barry O'Sullivan told Fairfax Media he was willing to cross party lines to protect his constituents.
Illustrating the anger, Queensland MP Robbie Katter, son of federal independent Bob Katter, said: "If (Agriculture Minister) Barnaby Joyce is not willing to cross the floor over this then he values his job in cabinet more than the farmers' livelihoods."
The dispute about debt-stricken farmers is flaring at a time when internal debate about the power of the Prime Minister's office and Coalition recriminations about the failure to sell Budget measures has dominated headlines.
Senator O'Sullivan, who will introduce a bill in the Senate next year to make it illegal for banks to foreclose on drought-hit farmers, said he was willing to deal with anyone in the Senate to get action.
"I'm telling my own government as it starts to wander over to the crossbench, don't forget to give me a glance," he warned.
"The National Party has been a very good Coalition partner in Canberra but this is a once-in-a-generation sort of crisis we have in Queensland."
Sources also said the illness of Nationals leader Warren Truss and speculation about his longevity in office has led to rising angst in Liberal ranks at the prospect of "Barnaby Joyce, Deputy Prime Minister".
Amid the tensions, Mr Joyce's office contacted three cabinet ministers last week to hose down claims in an open letter that has gone viral online that he openly refers to free market Liberals as "the s**ts in cabinet" for refusing to consider greater financial aid for drought-hit farmers.
The letter then identifies "uber-cool, city-centric" Communications Minister Malcolm Turnbull, Trade Minister Andrew Robb and Environment Minister Greg Hunt as the ministers who had provoked Mr Joyce's ire.
A spokesman for Mr Joyce said he "categorically denies using that language and also has no beef with those ministers".
Reports of Mr Joyce's collision with cabinet colleagues began at a recent rally in Winton, central Queensland, over the $60 billion farm debt crisis that has seen banks kick established farmers off their land.
At the rally, Mr Joyce alluded to friction in cabinet saying: "I'm being honest with people. If someone says 'start a rural development bank', I'm not going to get that through [cabinet]. You can only get that through if you've got the numbers, and it's just not going to fly."
An open letter by farmer David Pascoe, comparing the situation to Depression-era America, written after the meeting, went viral with the help of broadcaster Alan Jones and has been viewed more than 2 million times on social media.
In the letter, Mr Pascoe refers to Mr Joyce at the Winton rally as being in a "bitter blue-funk kind of mood that saw him mostly hunched over and staring at the floor".
"Joyce cannot get support from what he calls 'the s**ts in Cabinet' to create a desperately-needed Redevelopment Bank so that these farmers can get cheap loans to tide them through to the end of the drought," Mr Pascoe writes.
Mr Pascoe, who flew to the rally with Mr Jones, conceded Mr Joyce's words had come to him via a "third party" but said he stood by his letter, which has been credited with raising the pressure on banks.
ANZ last week announced a 12-month moratorium on foreclosures in the drought zone.
Senator O'Sullivan confirmed the divergence between the Nationals and Liberals on the issue of farm assistance. "Our Coalition colleagues are dedicated to free market philosophy, that water finds its own level. They tend to think we in the Nationals are inclined towards protectionist policies," he said.
A government source said: "Barnaby Joyce has a pretty good relationship with Liberal ministers but you can safely assume he drives people like [Finance Minister] Mathias Cormann up the wall with some of his views."