Queensland Independent MP Peter Wellington believes the Federal Coalition has intervened in the state's pay rise saga because it is worried the issue will harm its election prospects.

But a spokesman for Federal Opposition Leader Tony Abbott says that is a "complete fantasy".

Deputy Premier Jeff Seeney yesterday announced a review of massive increases for State MPs, after spending several days defending them.

The increases mean backbenchers will get an extra $57,000 a year and ministers will get an extra $90,000, while Premier Campbell Newman's pay has risen by $117,000.

It is understood the review will look to decrease the size of the pay rise rather than reverting to a pay freeze, which had been in place for Queensland MPs since 2009.

Mr Wellington says Federal Opposition Leader Tony Abbott would be furious and it is likely he ordered the LNP to fix the mess.

"This is clearly going to impact on the federal election," Mr Wellington said.

"Queensland is clearly going to be one of the real battlegrounds in Australia.

"There's no doubt that the Liberal National Party brand in Queensland has been significantly tarnished and discredited by the way Campbell Newman and his leadership team of his ministers have handled this matter."

Mr Abbott's office responded this morning, saying the issue is not a matter in which he would seek to interfere.

Public sector benchmark

The Queensland Council of Unions (QCU) says politicians' pay rises should be no higher than those given to any other state public sector worker.

QCU president John Battams says the current pay increase is totally unacceptable.

"At the moment I think the feeling would be no more than whatever is applicable to the public sector, which is 2.35 per cent.

"So in the absence of any proper independent assessment, we wouldn't be supporting any increase over and above what the public sector workers get."

LGAQ says no

Sorry, this video has expired Qld Opposition calls for Seeney's dismissal over pay rise bungle ( Chris O'Brien )

Greg Hallam from the Local Government Association says the decision also affects councils outside Brisbane and they will not be accepting the increase.

"We weren't able to in all conscience and good faith put our hand up for a 40 per cent increase," he said.

He has written to the State Government asking it to untie pay decisions from the State.

'Overturn the rise'

Member for Dalrymple Shane Knuth says the backflip is a win.

"Basically they were frothing at the mouth and basically this is a win for everyone," he said. "This is about overturning it full stop."

Katter's Australian Party (KAP) also says the State Government should ensure the pay rises are overturned.

Mount Isa MP Rob Katter welcomes the review, saying the KAP proposed a private members bill to stop the pay rise.

"It's a good win for common sense and the people of Queensland," he said.

"It was a terrible decision to start with and it reflects very very badly on the Government."

Lord Mayor urged to follow

Meanwhile, Brisbane Lord Mayor Graham Quirk is under pressure to follow the State Government's lead and reverse his position on the pay rise.

Councillor Quirk had previously supported the increase but had declined to front the media on the matter.

Council Opposition Leader Milton Dick says Councillor Quirk should cut the ties between council and State Government salaries.

"It was obviously the greed and the ambition of the LNP to secretly think that they could get away with this without any public scrutiny," he said.

"Well, time is up and Graham Quirk has been in hiding for the past couple of days. He needs to show leadership and rule this out today."

Councillor Quirk eventually spoke to ABC local radio this morning.

He says councillors will not receive a pay increase linked to state MPs until after the State Government's review.

"I can assure people there will be no pay increases given to councillors until we find where this lands," he said.

"One of the reasons I've been a little bit silent on this to date is until we know where the state is going to land on this we don't know whether to untie the system that we have or to not untie it."