Clive Palmer has announced his party will no longer contest state elections.

The Palmer United Party's strongest state representation came from Queensland, but that fell apart last year when Alex Douglas and Carl Judge, who both left the LNP to join Palmer United, abandoned the party to run as independents at the 2015 state election.

PUP MPs failed to win a state seat outright at any state election.

In a statement released on Tuesday, ahead of the federal budget, Mr Palmer said PUP would make federal elections its sole focus.