Labor is threatening to help Nick Xenophon bag government-held seats in South Australia if the Liberal Party does a deal with the Greens.

The popular independent senator is seen as a threat to the major parties, with concerns he could win several Senate spots and lower house seats, including those of cabinet minister Christopher Pyne and former minister Jamie Briggs.

Labor is warning it will help Senator Xenophon if the Liberal Party directs preferences to the Greens in the key Melbourne seats of Batman and Wills, The Australian reports on Friday.