One Nation leader Pauline Hanson has rejected the government’s plea to pass the full $158 billion income tax cut unveiled in the federal budget, putting the final stage of the tax plan in limbo.

Senator Hanson said she was not in favour of the third and final stage of the 10-year tax plan "at this stage" when government money should be spent instead on building new coal-fired power stations and water projects.

The One Nation leader has backflipped on tax policy in the past, embracing and rejecting the government's company tax cuts last year in an extended negotiation that ultimately collapsed.

But her latest comments show that Prime Minister Scott Morrison does not have the numbers in the Senate to legislate the full policy when Labor objects to the third stage and crossbench party Centre Alliance is considering its position.