Pauline Hanson has declared Scott Morrison has “handed the keys to the Lodge to Bill Shorten” by resolving to put One Nation below the Labor party on Liberal how-to-vote cards.

The besieged One Nation leader threatened retaliation for Thursday’s decision, branding the prime minister a “fool” and warning the decision would put Labor, the Greens “and the CFMEU” in power federally at the upcoming election, expected in May.

Hanson’s combative message was echoed by Mark Latham, the state leader of One Nation in New South Wales, who suggested the government would suffer in the coming federal contest if the far-right party chose to punish the Coalition by retaliating on preferences in close contests both in Sydney and the regions.

If One Nation mirrors the Morrison stance (i.e. preferencing Labor ahead of Liberals/Nationals) how will the Government fare in Banks, Gilmore, Hughes, Robertson, Riverina, Parkes etc??

Answer: bye-bye Sco-Mo — Real Mark Latham (@RealMarkLatham) March 28, 2019

Latham branded Morrison “weak”.

What kind of leader allows his political opponents (Labor, the Greens and their media arm, the ABC) to determine his preferences for him?

Answer: Weak Weak Scott Morrison. — Real Mark Latham (@RealMarkLatham) March 28, 2019

The prime minister’s statement about preference rankings to journalists on Thursday morning followed rising internal pressure to distance the Liberals from One Nation in the wake of the Christchurch tragedy and the extraordinary revelations this week about the far-right party’s pursuit of foreign donations in exchange for efforts to water down Australia’s gun laws.

Morrison took soundings from Liberal colleagues in a discussion after Tuesday’s cabinet meeting, with conservatives, including Peter Dutton, the most powerful figure in the Queensland LNP, expressing concern that a definitive negative statement on One Nation preferences would cost the government seats in Queensland.

Moderates, including Kelly O’Dwyer, who had argued publicly before the cabinet meeting that One Nation should be put last, and the trade minister, Simon Birmingham, urged Morrison to take a definitive stand, and spurn the far-right party. Referencing the Queensland pushback, O’Dwyer said the government should not be bullied by the Liberal National party.

Morrison acted on Thursday, after first signalling his intentions privately to several Queensland Liberals, including the veteran MP Warren Entsch, who told Guardian Australia he advised the prime minister to proceed. “He asked me would I have any negativity, and I said no,” Entsch said.

But Morrison’s directive does not cover Nationals. The Nationals leader, Michael McCormack, made it clear on Thursday he would not be following suit.

McCormack said preferences would be determined at the local level “so local members will be able to work their preferences out seat by seat through their state executives”.

The Nationals leader said he wanted to put the Greens last, and he contended Labor was indistinguishable from the Greens on issues like the opposition’s 45% emissions reduction target.

A spokesman for Tony Abbott also told the Sydney Morning Herald the former prime minister stood by an observation that he had made at the launch of Hanson’s book last year – that One Nation should rank ahead of Labor and the Greens on how to vote cards. “I would certainly put One Nation above Labor and the Greens because, let’s face it, we have been able to work constructively in the Senate with One Nation,” Abbott said last year.

The Labor leader, Bill Shorten, was underwhelmed by Thursday’s developments. He claimed Morrison’s directive would not cover the LNP in Queensland “and the Nationals appear to have been given a leave pass by their prime minister to keep doing secret preference deals with One Nation”.

Shorten noted that Morrison had indicated Labor would rank ahead of One Nation, but One Nation would not necessarily be put last on Liberal how to vote cards.

Morrison suggested that could be the Greens. The prime minister said on Thursday there’s “a lot of competition for who you put last from a lot of these parties”.

“Frankly, I always found the Greens to be a real serious danger to Australia.”

Shorten said Morrison needed to show leadership. “Leaders should stand for something. If Mr Morrison truly wants to show leadership, he’ll insist on all government MPs and candidates putting One Nation at the bottom of the ticket, where they belong”.