The Coalition's tenuous hold on the Lower House has been shaken by a Liberal National Party malcontent's threat to quit Government.

Key points: It is understood Mr Christensen is threatening to resign from the Government over its inaction in a sugar industry dispute

It is understood Mr Christensen is threatening to resign from the Government over its inaction in a sugar industry dispute His resignation would destablise the Turnbull Government and make it tougher to pass bills

His resignation would destablise the Turnbull Government and make it tougher to pass bills Mr Christensen is close friends with Senator Cory Bernardi, who quit the Liberals to form his own party

The Daily Telegraph is reporting George Christensen has again threatened to resign, citing Federal Government inaction in a dispute between a foreign-owned sugar mill and cane growers in his north Queensland electorate.

The ABC has confirmed Mr Christensen penned a "letter of demand" about the sugar industry stoush to the Prime Minister.

The ABC understands Mr Christensen contemplated threatening to resign in the letter to Malcolm Turnbull. But he decided not to send it.

Mr Christensen has refused to comment, but an LNP source said his commitment to the Government appeared to be a "day-by-day" proposition.

The threat Pauline Hanson's One Nation will bite deep in the National Party's heartland at the looming polls in Western Australia and Queensland has spooked federal Nationals MPs, who fear it is very difficult to fight anti-establishment parties when governing as part of the Coalition.

Some Nationals believe Mr Christensen is preparing to follow the lead of his close friend, Senator Cory Bernardi, and split from the Government to sit on the crossbench.

That would send shockwaves through the Turnbull Government, as it holds a majority in the House of Representatives by a single seat.

Such a move would not see the Government fall but would destabilise it and add yet another hurdle to getting its agenda through Parliament.

If they voted together Mr Christensen, the rest of the crossbench and Labor could block Government bills.

Mr Turnbull has buttressed his hold on power by securing a guarantee in money bills and confidence votes from crossbenchers Cathy McGowan, Bob Katter and Andrew Wilkie.

You've got to be a team player: O'Dowd

Nationals MP Ken O'Dowd said tensions with Mr Christensen needed to be resolved inside the party room or "inside the tent, rather than outside the tent".

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"We want certainty too in the Parliament and we want loyal members, with all this innuendo going on I just don't know where George is coming from," he told the ABC.

Mr O'Dowd said Nationals MPs should not use their position in the Lower House for leverage and should remain loyal to the party.

"I think its most unsatisfactory and its not giving much of a hope for the rest of the national party members and I'm sure they think, like me, that we want a stable, clear voice," he said.

"You've got to be a team player in this game. Its disappointing from a member's point of view that there is such discontent that you want to leave the party — I just don't get it."

MPs 'growing tired of empty threats'

Another Nationals source told the ABC Mr Christensen's colleagues were growing tired of his repeated threats to resign, but leader Barnaby Joyce was unable to pull the maverick Queenslander into line.

Mr Joyce has freely admitted to colleagues that he was not able to preach discipline because he was such a renegade as a senator.

The ABC understands Mr Christensen sees a model in West Australian National Tony Crook, a federal MP who sat on the crossbench as a representative of the WA Nationals.

But that party has a loose alliance with the Liberals, while the two have amalgamated to form the LNP in Queensland.

Mr Christensen hasn't yet crossed the floor but has signalled his intention to do so if a bill is presented on a banking royal commission.

However, he has consistently and publicly complained about Government's policies, including:

'He's not going anywhere': Pyne

Senior Government ministers are playing down speculation about Mr Christensen, with Defence Industry Minister Christopher Pyne telling Channel Nine the reports were "just another typical beat-up from the media".

"I can tell you George Christensen's not going anywhere," Mr Pyne said.

"George has confirmed that he's remaining within the Coalition, he's a valued colleague, he's making a great contribution."

But Mr Christensen has only spoken recently about his desire to "remain in the Nats".

He did not mention his loyalty to the party's coalition with the Liberal Party.

Mr Joyce made similar comments on Friday.

"I know that George has said he's loyal to the National Party, I'm good mates with him, he's loyal to me and I hope and I believe that George will be loyal to his nation and stick with a good government." Mr Joyce said.