Clive Palmer denies a wide-ranging Senate inquiry into the Queensland Government is about getting back at Premier Campbell Newman.

The Palmer United Party (PUP), the Federal Opposition and the Greens have combined to set up the six-month select committee into Queensland Government administration.

The inquiry has broad terms of reference to look into the use of Commonwealth funds, the administration of the courts and judicial system, and development and environmental approvals, including for coal seam gas projects.

The select committee, which will consist of five members but only one from the Coalition, has a reporting date on or before March 27 next year, three days after the scheduled Queensland election.

Mr Newman is currently on leave but released a statement yesterday calling the inquiry a "stunt".

Deputy Premier Jeff Seeney said his Government had "nothing to hide" and it was too early to say whether there would be a legal challenge.

He said Mr Palmer was still reeling from a state decision to reject his bid for a Galilee rail line.

"We're talking about a politically motivated stunt that's seeking revenge for a business decision that Clive Palmer didn't get to go his way," he told 612 ABC Brisbane.

"The Labor Party and the Greens have done a dirty deal that is going to cost jobs in Queensland.

"The deal is that the long-awaited changes to the approval process for resources project, that started under Julia Gillard's prime ministership, have now been bartered away, so Clive Palmer can pursue his vendetta for revenge."

Mr Palmer dismissed Mr Seeney's claims.

"Mr Seeney is just a liar," he told 90.3 ABC Sunshine Coast this morning.

"Jeff Seeney doesn't care about Queenslanders, he doesn't care about their jobs or their families, he just cares about himself and how big his superannuation can be."

Mr Palmer said without an upper house in Queensland, the investigation would be an opportunity for the public to have their say on recent controversial decisions.

"If there is nothing that the Newman Government has done to upset anyone, or breach the law themselves, then they have nothing to worry about," he said.

"I think that they all know that there is something wrong in this state that could be better, and people's lives could be better."

He said it was not the first time the Senate had investigated a state government.

In 1993, the Liberal-dominated Senate investigated the Goss government and the Heiner affair, and in 2007 another inquiry was launched into Labor's approval of the Traveston Dam in the Mary Valley.

I want to bring them to account: Lazarus

PUP Senate leader Glenn Lazarus used Senate procedure to bring on debate to set up the inquiry, after losing a similar bid last week.

He said the inquiry was about providing checks and balances in a state without an upper house.

"Whether or not that brings them down, we'll have to wait and see," he said.

"But I just want to bring them to account and give the people of Queensland an opportunity in a safe environment where they will not be threatened with the sack or harassed to give their evidence and voice their concerns."

Fellow PUP senator Jacqui Lambie said an inquiry was overdue.

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"There's a lot of unrest in Queensland right now. There's a lot of annoyed people up there and there's a lot of annoyed voters," she said.

Government Senate leader Eric Abetz said the inquiry abused an established principle that federal and state parliaments stay out of each other's business.

"It's basically a bitch session about Queensland," he said.

"What's the concluding time for this Senate inquiry? Oh, it just happens to coincide with the Queensland election."

LNP senator Barry O'Sullivan told Greens and Labor senators: "You should have spent a bit of time looking at this, you guys.

"All the good bits, [it] will also relate to looking at the Labor government, it is not time-barred."

The Greens defended their decision to back the motion for the inquiry, in exchange for a promise from PUP senators to block the Federal Government's plans to delegate to the states its environmental approval powers for major projects.

"This is a Senate inquiry, it won't be the plaything of any one party," Queensland Greens senator Larissa Waters told AM.

She said the Greens would be pursuing Mr Palmer's environmental record.

"I was particularly cautious and focused to ensure we could expand the terms of reference so the Greens could make sure that this inquiry does examine the regulation of Mr Palmer's businesses, including his mega coal mines and his Yabulu nickel refinery on the shores of the Great Barrier Reef," she said.

She said the inquiry would also look deeper into mining approvals from the Bligh government.

"We've been able to extend out the terms of reference to cover the dodgy coal seam gas approvals that were issued by the former Labor government," she said.

The Queensland Opposition said it was looking at the details of what the inquiry would involve.

Opposition Leader Annastacia Palaszczuk said it was not the first time Federal Parliament had inquired into state matters.

"This is an inquiry initiated by the Senate, they are the masters of their own destiny," she said.

"They've initiated this inquiry and if the Government has nothing to hide, they have nothing to fear."

Law expert warns of potential legal challenge

Meanwhile, a constitutional law expert has warned there could be a legal challenge to the inquiry if senators try to compel Mr Newman or any other politicians to give evidence.

University of Sydney constitutional law professor Anne Twomey said the inquiry raises two areas of legal doubt.

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"The first is a subject matter area, and they've been careful in making sure that there's a link to Commonwealth legislative power," she told AM.

"But the second area of doubt is about whether they can compel evidence from state politicians, from state public servants and can compel the production of documents."

Professor Twomey said the only previous inquiry of its kind, a 1996 select committee into the Victorian Casino, was effectively abandoned when senators decided they could not make findings without compelling witnesses to appear.

Sorry, this video has expired Qld Government says it's ready to face a Senate inquiry ( Melinda Howells )

The inquiry into the Queensland Government may face the same problem.

"It may be that there's enough evidence material around for them to inquire into this and to come to conclusions," Professor Twomey said.

"But if they want to discover evidence that they can't otherwise get by attempting to compel evidence, then that would certainly lead to a court challenge."

She said that could have unintended consequences for the whole Senate committee system.

"From a Senate point of view, they may not want to test that in a court because not only may they find out that they've got no powers to do those sorts of things, they may discover that they have even fewer powers in other areas as well," she said.

"It's a little Pandora's box that as a general principle the Senate tries not to open."