The Australian Greens has issued a slap down to the formation of formal factions just weeks after the establishment of the controversial anti-capitalist group Left Renewal within its ranks.

A statement issued by the Australian Greens National Council on Sunday declares formal factions "incompatible" with the party's principles.

The statement comes amid escalating tensions between former party leader Bob Brown and Senator Lee Rhiannon over the party's direction under Senator Richard Di Natale.

Ms Rhiannon - who is on the left of the party - last week said the Greens are at a "crossroads" and should consider adopting the policies of former US presidential candidate Bernie Sanders.