The federal Labor Party appears set to abandon any promise to block Indian conglomerate Adani from mining coal in Queensland’s Galilee Basin, fearing it could expose a Labor government to a massive compensation bill.

As left-wing delegates to next week’s Australian Labor Party national conference gear up for a fight on a range of issues, including refugee policy, free trade and the level of the Newstart allowance, senior members of the faction are distancing themselves from previous suggestions a Labor government could seek to block the controversial Adani mining proposal.

At the same time, a larger than usual crossbench of non-aligned delegates at the conference means neither of the two main factions command an absolute majority, forcing a greater degree of early negotiation – partly to avoid the public brawling over policy that marked the 2015 conference.

The Saturday Paper has been told the party has advice that adds to concerns about both sovereign risk – the risk that Australia’s international credit rating could be jeopardised – and the likelihood that Adani could sue successfully if an incoming Labor government moved to block the mine.

Faction leaders are trying to strike a balance in favour of, as one MP puts it, “discipline with a bit of dissonance”.

But other senior Labor MPs cast doubt on the existence of such advice, saying they were unaware of it, or that any formal position had been taken on the issue.

Indications of a shift on Adani follow earlier suggestions that Labor could seek to use environmental law to block or revoke approvals for the mine on the grounds of its impact on the Great Barrier Reef.

Some in the wider Labor Party – and beyond it – are likely to see any shift citing legal advice as a convenient means by which those in the Right faction, including leader Bill Shorten, can walk away from the anti-Adani rhetoric they adopted in the shadow of the Batman byelection in inner Melbourne early this year.

Others insist the legal and monetary implications are genuine, especially given the costs the Victorian Labor government incurred when it reversed its Liberal predecessors’ plans to build the East West Link road project across Melbourne.

In February, Shorten endorsed the concerns of workers at coalmines elsewhere in Australia, after they expressed a fear that the Adani mine might jeopardise their jobs.

“We need to make sure that all scientific approvals have been diligently researched,” Shorten said at the time.

But last week he was downplaying any likelihood of review, as the company made another announcement promising work on the mine was imminent.

“We don’t know what they’ll be up to by the time we get into government, so we’ll deal with the facts of the situation we’re presented with, if we win the election,” Shorten said last Friday.

“… But suffice to say, we’ll make decisions at that point based in the national interest. Of course we’re not interested in sovereign risk or breaking contracts. We’ll be guided by the best science and the national interest.”

Two of the most senior left-wing members of Labor’s shadow ministry, deputy leader Tanya Plibersek and Labor senate leader and shadow foreign minister Penny Wong, have expressed similar sentiments in the days since.

“People shouldn’t think it’s easy to, first of all, ignore signed agreements, or tear up signed agreements that have been made,” Plibersek told ABC radio’s AM program the same day.

“If we want a system where governments ignore the law, then just as people are asking Labor to ignore the law in this case, the Liberal government could ignore the law if environmental approvals were refused, they could override those refusals. So I just think we need to be very careful when we are talking about ignoring the law.”

Last Sunday, Wong concurred. “There is a thing called sovereign risk,” Wong told ABC TV’s Insiders. “And we don’t want to be a country which has any skerrick of a reputation that we’re prepared to engage in activity after the fact which could endanger any form of investment or project. So it’s very difficult and not sensible to stop things after they are proceeded with.”

Shorten, Plibersek and Wong all doubted Adani would ever actually mine coal in the Galilee, it having had repeated false starts. The company struggled with obtaining finance and then faced another setback when the Queensland Labor government vetoed its application for federal funds to build a railway line.

While some delegates may still demand a stronger position against the Adani mine, other issues are expected to attract greater opposition at the ALP’s national conference, now set for December 16-18 in Adelaide and having been rescheduled after it clashed with the so-called Super Saturday of unexpected byelections in July.

Faction leaders are trying to strike a balance in favour of, as one MP puts it, “discipline with a bit of dissonance”.

With a federal election due within months, they are conscious of the need to prove to voters that Labor is ready to govern and avoid any impression of a divided rabble.

At the same time, they don’t want such a stage-managed affair that it ends up like a “Kevin 07-style coronation”.

On refugees and asylum seekers, several sticking points remain, including over the size of the humanitarian intake under a Labor government, proposed changes to the review arrangements for rejected applicants and the level of income support available to people awaiting determinations.

The draft platform says Labor “aspires to progressively increase” the number of humanitarian migrants to 27,000 a year. Some refugee advocates want more than that.

The Saturday Paper has been told the Left is likely to push for “a number with a three in front”.

The Australian Council of Trade Unions congress endorsed closing down the offshore detention centres on Manus Island and Nauru but the ALP’s draft national platform is silent on that point.

Labor for Refugees has the backing of some in the parliamentary Left to push for a ban on turning back boats.

Others in the faction are resisting reopening that debate, however, citing evidence that the practice has been instrumental in thwarting the efforts of people smugglers to send desperate asylum seekers to Australia.

Negotiations on the refugee parts of the platform had been scheduled between a working group of left-wing Labor MPs and shadow immigration minister Shayne Neumann for Wednesday this week, but were postponed as parliament wrestled with crossbench legislation seeking to bring to Australia children detained on Nauru and medically certified sick adults from both island locations.

Labor backed the crossbench push, in a move Shorten is expected to use to demonstrate to the refugee advocates in his party that he is serious about improving the plight of those in offshore detention. Negotiations by the working group are now expected to occur next week.

Also in the mix, unions are driving a push to strengthen protections within bilateral free trade agreements against importing foreign labour beyond what is already in the draft platform.

They are also demanding a firm undertaking on industry bargaining as part of the party’s industrial relations policy.

And Shorten faces potential pressure over the policy on Newstart, with the draft platform committing only to “review the adequacy of Newstart and related payments” along with other supports and services for the unemployed but not specifically to increase them. Some want a firm commitment to an increase included, with a figure attached, while others have affordability concerns.

On Adani, the compromise is being sheeted home to budget-driven pragmatism and concern about Australia’s investment reputation.

Early this year, ahead of the Batman byelection, Shorten’s fear of losing the seat to the Greens prompted tougher anti-Adani rhetoric, setting him at odds with those in his party, particularly in Queensland, where there is support for the mine on its promise of jobs.

Labor retained the seat, with former ACTU secretary Ged Kearney claiming victory.

This week, anti-Adani campaigners, including the Greens, ramped up pressure over the issue.

Protesters caused the temporary closure of Parliament House’s front entrance on Wednesday after getting through security and into the foyer, where they unfurled banners and made speeches before being removed.

In the senate, Queensland Greens senator Larissa Waters sidestepped a ban on wearing slogans, sporting red-and-white stop-sign earrings large enough that their “Stop Adani” message could be read from across the chamber.

Angry at Waters’ creative interpretation of the rules, Queensland Liberal Ian Macdonald demanded senate president Scott Ryan outlaw the offending accessories.

Ryan said he would consider the request, assuring Macdonald he was welcome to wear his own earrings into the senate in the meantime.

When Macdonald arrived the next day with a head-sized red-and-white cardboard disc attached to his ear, plastered with the words “You can’t #stop Adani”, Ryan swiftly added earring slogans to the banned list.

Labor’s parliamentary leaders weren’t parading the sentiment quite as colourfully as Macdonald. But it seems they agree with him.