The CIA has denied mining magnate Clive Palmer's claims that it is funding a campaign to attack the Australian coal industry.

The Federal Government sought to bracket the Coalition with Mr Palmer during another testy session of Question Time, while Queensland's LNP leader Campbell Newman said the donor's conspiracy theory had nothing to do with him.

The billionaire yesterday alleged that a Greenpeace plan to launch legal action against future coal mining projects was funded by the CIA with the aim of harming Australian industry and helping American interests.

He also targeted the Greens, claiming they were "tools" of the United States government.

"I think the Greens in this coming state election, all their candidates should resign if they are being funded by an offshore political power," said Mr Palmer, who is a major backer of Queensland's Liberal National Party.

Space to play or pause, M to mute, left and right arrows to seek, up and down arrows for volume. Listen Duration: 5 minutes 25 seconds 5 m Palmer's CIA conspiracy theory dominates Question Time Download 2.5 MB

But a CIA spokesman has told the ABC via email that the claims are wrong.

"Simply put, these allegations are false," he said.

Mr Palmer is standing by his claim but has sought to soften his criticism of the green movement, telling the ABC he is mainly concerned about Queensland Greens founder and long-time environmentalist Drew Hutton.

In a statement issued via Twitter today, Mr Palmer said: "Green movement in Queensland led by Drew Hutton should not be funded by foreign interests. Bob Brown isn't associated the same way."

Mr Hutton said he was considering suing Mr Palmer for defamation but that an apology would suffice.

"If you say something which is unfair to someone, if you're a decent human being and you realise you've been unfair, you apologise. That's the decent thing to do," Mr Hutton said.

In a statement, Greenpeace senior campaigner John Hepburn rejected Mr Palmer's comments as "ludicrous".

He said Greenpeace would not accept money from any government, corporation or secret service.

Senator Brown has challenged the LNP and federal Opposition Leader Tony Abbott to repudiate Mr Palmer's statements.

'Too much Get Smart'

In Parliament, Attorney-General Nicola Roxon called on Mr Abbott to give the mining billionaire a "dressing down" for feeding conspiracy theories.

"This is a bizarre allegation, and I do have to wonder whether perhaps Mr Palmer has been watching too much Get Smart - he certainly is working very closely with Kaos over there," Ms Roxon told Parliament, referring to the evil intelligence organisation in the TV series.

"The Leader of the Opposition should be calling Mr Palmer and giving him a dressing down for this sort of behaviour, and he could use his shoe phone if he thinks that's a better idea."

Space to play or pause, M to mute, left and right arrows to seek, up and down arrows for volume. Watch Duration: 2 minutes 18 seconds 2 m 18 s Brown urges Newman to reject Palmer's CIA claims ( ABC News )

Special Minister of State Gary Gray was the first to mention the links between the Coalition and Mr Palmer, in response to a question from the Government's backbench about political donations.

While noting the significant contribution trade unions make to Labor, and the $1.6 million businessman Graeme Wood donated to the Greens, he said Mr Palmer's contributions to the Coalition are on a different scale.

"High net worth individuals of course are at liberty to make decisions to support our political parties and our political processes as is their want," he said.

"The total contribution to the Coalition now from Mr Palmer is over $4 million in the last few years.

"Mr Speaker, the amount now of $4 million in donations as recently disclosed by the Australian Electoral Commission is a point of note for all Australians."

Mr Gray's opposition counterpart Bronwyn Bishop took offence.

"I would remind the Minister that the West Australian Labor Party received $160,000 in donations from Mr Palmer," she said.

During the heated Question Time, Speaker Peter Slipper ejected eight MPs for defying his rulings.

'Larger-than-life'

Earlier, Mr Abbott laughed off Mr Palmer's claims.

"He's a larger-than-life character and I think when he says that the Greens want to stop the coal industry he's absolutely right - of course the Greens want to stop the coal industry," Mr Abbott told Channel 10.

"I don't think they need any CIA influence though to give them that position."

In Queensland, LNP leader Campbell Newman distanced himself from the conspiracy theory advanced by his party's main backer.

"It's got nothing to do with myself and this campaign, I can tell you that," he said.

Foreign Minister Bob Carr said Mr Palmer's "recklessly irresponsible" claim against the CIA would trigger concern from the American government and business figures.

"Clearly it's not in America's interest to see the economy of an ally and a great trading partner go down in a heap," Senator Carr said.

According to the latest financial disclosure returns, Mr Palmer's Mineralogy gave the Coalition parties, at federal and state levels, nearly $500,000 last financial year.

His Queensland Nickel gave another $500,000 to the Queensland LNP.

Through that company he also gave $2,750 to the Labor Party in Queensland.