PRIME Minister Julia Gillard's plan to hit taxpayers with a $60 million bill to fund election campaigns has been torpedoed after the Coalition abandoned its support for the legislation.

Liberal sources confirmed last night there was overwhelming momentum to ditch what had previously been bipartisan support for the deeply unpopular plan.

The Coalition informed the government last night that it had withdrawn its support.

Attorney-General Mark Dreyfus was still hoping the legislation might be voted on next week but admitted Labor "won't be proceeding" if the Opposition dropped its support.

Ms Gillard is feeling the heat, with former government whip Joel Fitzgibbon admitting "members everywhere" would be fielding phone calls and emails from angry constituents over the legislation."Every MP will be getting complaints in their electorate offices ... this week. I certainly am," he said.

A deal on the reform was originally negotiated between senior Labor and Liberal figures but Mr Abbott had not formally declared his position.

Liberal MP Russell Broadbent went public yesterday, saying a "very large number" of Coalition parliamentarians was opposed to the plan.

Under the plan, Labor and the Coalition would have shared about $15 million a year based on a new funding model of $1 per vote, with funding to commence from July.

"It destroys our credibility and integrity; this is a rort," one Labor MP said.

Some government MPs said the timing of the deal was another example of Ms Gillard's poor judgment.

"This is just putrid and has been handled badly," one senior Labor MP said.

Meanwhile, corporate executives are being asked to shell out up to $10,000 for intimate "pay-per-view" dinners with Ms Gillard and Mr Abbott as Labor and the Coalition engage in a fundraising frenzy to build their war chests for an election expected to cost more than $100 million.

Even the Nationals are cashing in on the Coalition being red-hot poll favourites, with business observers paying a record $8800 for a "premium" ticket to this weekend's federal council in Canberra.

While the polls give Labor little hope of re-election, Ms Gillard and her most senior ministers are reaching out to business as the ALP seeks to boost its finances to defend a raft of vulnerable seats.

Ms Gillard, Treasurer Wayne Swan, Workplace Relations Minister Bill Shorten and Infrastructure Minister Anthony Albanese will be involved in an "intimate" boardroom dinner in Sydney on June 11, part of a host of Labor fundraising events over the next few months.

Originally published as Liberals sink Gillard's election law