Clive Palmer has declared the Abbott government needs to scuttle the $3.4bn GrainCorp takeover, arguing the Nationals need to stand up for their constituents, not for a group of merchant bankers in Sydney.

The leader of the Palmer United party said on Tuesday it was not in the national interest to allow GrainCorp to be acquired by the US company Archer Daniels Midland.

Joe Hockey needs to make a decision on whether or not to approve the proposed takeover by 17 December.

The treasurer has warned Coalition colleagues publicly critical of the sale, including the deputy prime minister, Warren Truss, the agriculture minister, Barnaby Joyce, and NSW senator Fiona Nash, that he will not be “bullied” on the decision.

Palmer moved to maximise the Coalition’s internal discomfort on the politically sensitive transaction by speaking out forcefully against the takeover.

He is known to have expressed an interest in recent days in serving on the federal parliament’s prestigious economics committee, which would give him a platform to comment on a range of policy matters.

He said on Tuesday that Nationals MPs and senators needed to stand up, not only for their country but the people who got them elected to parliament.

The default allegiance should not be to a political party or to a group of “merchant bankers in Sydney” but to the voters, he said

“If this takeover goes ahead it will … be the beginning of the end for a lot of our industries in Australia,” Palmer said.

He said there had been some suggestions that the transaction could be approved with conditions, but that was “just rubbish”.

He declared the Foreign Investment Review Board a “rubber stamp with no purpose”.

“The treasurer has talked about the possibility of putting conditions on any FIRB approval, but that’s just rubbish,” Palmer said.

“I have been in many transactions gone to the FIRB board based on various undertakings that were broken by foreign corporations. The FIRB has no teeth, no penalty, there is no watchdog seeing what happens afterwards.

“You can tell anything you like to the FIRB. That’s the reality of our foreign investment review board.”

Underscoring the political sensitivities, the Labor caucus also heard concerns about the proposed takeover on Tuesday.

The shadow treasurer, Chris Bowen, has been arguing publicly of the broad merits of foreign investment in Australia's national interest in an effort to suggest some bipartisanship on this transaction should Hockey rule in favour of the takeover.

Bowen faced questions from caucus colleagues on Tuesday about whether undertakings about investment would be followed through if GrainCorp were sold to a foreign company.

He undertook to put concerned colleagues in touch with representatives from the firms involved in the transaction.