South Australian senator Cory Bernardi is set to announce he is leaving the Coalition to form his own political party called Australian Conservatives.

The ABC understands Senator Bernardi has not invited any of his colleagues to join him at this stage, and has not spoken to the Prime Minister or any senior ministers about his impending move.

Senator Bernardi set up the Australian Conservatives website last year to build a grassroots conservative movement, to reconnect with voters and restore traditional Menzies-era values.

But the ABC understands he made up his mind to split from the party in December when the Government left the door open to setting up an emissions trading scheme.

At the time, Senator Bernardi, who had just returned from a three-month stint at the United Nations, said it was "one of the dumbest things I've heard in politics", and questioned why the party was re-opening a bitter and divisive policy debate that had been settled years earlier.

In his latest newsletter, Senator Bernardi foreshadowed a "testing year" for the Government.

"Unfortunately there are too few in our body politic willing to take the path less travelled — a trustworthy track that has fallen out of use," he said.

"For the sake of our nation, we must get back on track."

Bernardi concerned Coalition 'bleeding votes'

The South Australian senator is a social conservative and economic liberal. He believes in small government, lower taxes and free trade, and thinks the Coalition has drifted from these values.

After the July election, Senator Bernardi raised concerns about the fact the Coalition had "bled" more than a million votes to conservative parties such as One Nation, and said at the time his party was neglecting its base.

The ABC understands he was also frustrated that his party's leaders were too politically correct and refused to address cultural issues like the rise of radical Islam.

Since then, he's declared "there's never been a more exciting time to be a backbencher" and has led the charge to change the nation's racial discrimination laws, prompting the Prime Minister to establish a parliamentary inquiry, and forced the Government to rule out any form of carbon pricing ahead of a wider review.

Who will jump ship with Bernardi?

Senator Bernardi considers himself a "lone wolf" in the Liberal Party and even his colleagues are struggling to guess which, if any, MPs will jump ship and join him.

Loading

Conservative LNP MP George Christensen and Liberal senator Eric Abetz have publicly declared they will not be defecting, and the ABC understands Senator Bernardi is not considering approaching former prime minister Tony Abbott.

The ABC has spoken to a number of MPs who say he is a valuable member of the Liberal Party and are disappointed at the news he has decided to leave.

However, one MP said the Government appeared to be directionless at the moment and he was not surprised by the timing of Senator Bernardi's move, particularly after a number of Coalition MPs tried to reinvigorate debate about same-sex marriage.

"We haven't learnt the lessons from Brexit and Trump," the source said.

"And the fact that just after the Prime Minister delivered his signature address, outlining his agenda for the year, people tried to drag identity politics back into the mix and sully and confuse the message."

The MP attacked those colleagues and questioned their political judgement.