Open warfare has broken out between the Liberal and the National parties with New South Wales National senator Fiona Nash joining her party leader, Warren Truss, in attacking the Liberal shadow treasurer, Joe Hockey, for being “disconnected” from regional Australia.

The war began over Liberal party advertisements in the West Australian newspaper on Saturday which claimed credit for the $1bn national stronger regions fund Truss announced on Thursday.

The advertisement used a picture of the Coalition leadership team but Truss had been taken out and the word “national” had been removed from the fund’s title.

The Liberals and Nationals are fighting each other in two “three-cornered” contests in Western Australia, in the seats of O’Connor, where Nationals MP Tony Crook is retiring, and Durack, where Liberal Barry Haase is retiring. The National party is making a strong showing in both seats.

When asked about the advert on Saturday, Hockey endorsed the Liberal candidates, saying: “If you’re not part of the team, you are part of a protest movement that has no influence.”

Nash said: “It just shows how disconnected Joe Hockey is from regional Australia and shows even more how important the National party is.

“If that seriously is what Joe Hockey thinks about the National party then there needs to be some very strong discussions taking place. The comment was beyond the pale.”

The row marks a dangerous rift between the National party and its Coalition partners, particularly Hockey, who, if he becomes treasurer, will have sole responsibility to decide on the fate of the sale of agribusiness GrainCorp to US multinational Archer Daniels Midland – a move which the Nationals fiercely oppose.

On Saturday, Truss expressed his “disgust” at the “blatantly dishonest advertisement” run by WA Liberals in the West Australian to claim “exclusive” credit for a fund the Liberal party had nothing to do with.

"The Nationals have fought for two years to get this fund up and neither of the WA Liberal candidates for O'Connor or Durack had any part in the inception of the national stronger regions fund,” Truss said.

“I welcome the WA Liberals support for the fund now that it has been announced but I heard nothing from them before it was negotiated between Tony Abbott and me.”

The $1bn fund was modelled on the western authorities royalties for regions fund, which was negotiated by WA National leader, Brendan Grylls, when the Liberals came to power in the 2008 state election.

Refusing to enter into a coalition with the WA Liberals and holding the balance of power, Grylls insisted 25% of mining and petroleum royalties should be reinvested in regional areas and threatened to join with Labor if it agreed to the deal.