Clive Palmer is facing mounting pressure to repay more than $6 million funnelled into his own political party from his struggling Queensland nickel refinery.

Key points: Local MP says situation at refinery "beggars belief"

Local MP says situation at refinery "beggars belief" Queensland Nickel donated nearly $290,000 to PUP two weeks before sacking refinery workers

Queensland Nickel donated nearly $290,000 to PUP two weeks before sacking refinery workers Refinery donated almost $6 million to PUP in 2014-15 financial year

Refinery donated almost $6 million to PUP in 2014-15 financial year Palmer accused of "ripping" money from business to fund "political fantasies"

Mr Palmer's Queensland Nickel sacked nearly 240 workers on Friday, citing low nickel prices and the Queensland Government's refusal to guarantee a $35 million loan.

During the 2014–2015 financial year, Queensland Nickel had enough money to donate $5,947,720 to Mr Palmer's Palmer United Party.

And on Saturday figures released by the Electoral Commission of Queensland revealed Queensland Nickel donated $288,516 to PUP on December 31, just a fortnight before letting staff go.

Local federal LNP member Ewen Jones said Mr Palmer, the self-styled billionaire who is also federal member for Fairfax, should pay the millions of dollars back to the refinery.

"It beggars belief, to be quite honest, you can have what was going on in December between Mr Palmer, Queensland Nickel, (managing director Clive) Mensink and the Queensland Government, and they turn around and say they can donate another $290,000," Mr Jones said.

"I think the workers at Queensland Nickel are very fatalistic at the moment.

"Mr Palmer should use every bit of his influence with both himself, Queensland Nickel and Palmer United Party to send a message to everyone in Townsville and all levels of government that he's very serious about this refinery, and do whatever he can to make sure the money paid out by Queensland Nickel to Palmer United Party is repaid as a matter of faith."

Mr Palmer was in discussions with the Queensland Government for a $35 million bailout to keep the nickel operation at Yabulu near Townsville afloat but was knocked back late last year.

Queensland Opposition Leader Lawrence Springborg said he supported the Labor Government's decision to decline financial support to the company.

"We have Mr Palmer on one hand donating money to his own political party from his company which is involved in retrenching almost 240 workers, and calling on the Queensland State Government to bail out his company," he said.

"I think that many people would certainly be shaking their head as to the audacity of that.

"We don't expect the Government to come in and bail out private businesses — that is not the role of government."

The Yabulu nickel plant, north of Townsville. ( AAP )

Union and workers respond to 'horrible saga'

On Friday the Australian Workers Union (AWU) said it believed about 550 employees would remain with the business after the lay-offs.

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AWU state secretary Ben Swan it had been "a horrible saga that's been going on for a number of months".

"Palmer needs to stop ripping money out of the business to fund his political fantasies," he said.

The State Government has set up a taskforce to help workers with their entitlements.

Sacked employee and union delegate Steve Lovell said he would be waiting with anticipation for updates.

"I'll just be waiting for Wednesday I suppose, to see if we can get paid our entitlements," he said.

Fellow sacked employee Rohan O'Farrell said while the decision was disappointing for workers, it was no surprise.

"It's not unexpected news ... the place has been down for 12 months or so. It's just happened to come to a head today," he said.