Opposition Leader Tony Abbott is refusing to back the deal made between the Federal Government and the resources sector over its redesigned resources tax.

Mr Abbott is not rescinding his calls for a new tax on the mining industry to be dumped and has declared that the next election will be a referendum on it.

The Government has backed down on several key areas in a bid to end the damaging stoush with the resources sector, dumping its Resource Super Profits Tax for the Minerals Resource Rent Tax (MRRT).

Tax renamed the Minerals Resources Rent Tax

Tax renamed the Minerals Resources Rent Tax Will only apply to iron ore and coal

Will only apply to iron ore and coal Iron ore and coal will now be subject to a new tax at a rate of 30pc instead of the original 40pc

Iron ore and coal will now be subject to a new tax at a rate of 30pc instead of the original 40pc Tax will kick in at the government bond rate plus 7 per cent, which would be around 12 per cent

Tax will kick in at the government bond rate plus 7 per cent, which would be around 12 per cent Oil and coal seam gas to be rolled into the existing Petroleum Resources Rent Tax and taxed at 40pc

Oil and coal seam gas to be rolled into the existing Petroleum Resources Rent Tax and taxed at 40pc Changes mean the Government loses $1.5 billion of expected revenue

The industry has welcomed the deal and share prices soared in early trade in the wake of the announcement.

Prime Minister Julia Gillard has hailed the breakthrough as a win for the Government as it prepares to go to the polls in the coming weeks and consolidate its position in the wake of Kevin Rudd's ousting as prime minister.

The Opposition has said it would block the tax and the deal struck has not swayed Mr Abbott.

"I think it's clear form the Prime Minister's comments this morning that battlelines are drawn for the coming election," he said.

"The next election will be a referendum on tax.

"The Government wants a new tax, the Coalition doesn't. It's as simple as that.

"Any commitment that the Prime Minister made to the industry are as believable as her previous protestations to Kevin Rudd.

"This tax has to be dumped."

Opposition Treasury spokesman Joe Hockey says the new regime will be the most complicated in the world.

He has accused Wayne Swan of being the most incompetent Treasurer Australia has ever had.

"This is not tax reform, this is tax confusion," he said.

Resources Minister Martin Ferguson has told The World Today Mr Abbott is now alone in his opposition to the tax.

"They're the only ones out there in splendid isolation at the moment opposing the mining companies who are now accepting of the need to pay higher taxes," he said.

"If Tony Abbott and the Opposition want to completely oppose reform in Australia they will stand condemned."

Treasurer Wayne Swan says any legislation is unlikely to enter Parliament this year.

The Greens support the tax but will seek to make amendments.

The Greens are tipped to hold the balance of power in the Senate after the election but those changes would not take place until the end of the Senate term in July next year.

Mr Ferguson says the Government wants to get the tax through Parliament unchanged.

The new tax will result in a loss of $1.5 billion in revenue for the Government which means it will not be able to fund its proposed 2 per cent cut in company tax.

The rate will instead be cut by 1 per cent to 29 per cent.