The move could spell fresh trouble for the federal budget, with the government banking on saving $1.3 billion from the agency's abolition. It comes a day after Palmer United Party leader Clive Palmer blew a $9 billion hole in the government's deficit repair efforts by revealing his party would oppose a range of savings measures linked to the repeal of the mining tax. Former New South Wales politician Peter Breen, who Senator Muir has hired as a policy adviser, said the senator was concerned about research and development. "He wants to see legislation in place that preserves it and expands it," Mr Breen said. Saving the agency would require the backing of the three PUP senators with whom Mr Muir has an alliance.

Labor and the Greens also oppose the axing of the agency, and the Greens will also move similar amendments to the carbon tax repeal bill to Senator Muir. Greens Leader Christine Milne said on Tuesday: "The Greens welcome Ricky Muir's support for the renewable energy agency and we hope that he will bring his Palmer United Party colleagues along with him." The legislation to repeal the carbon tax, which was first released in November last year, also contained cuts to the ARENA's budget, which is set under law. Coming into government, the Coalition had initially vowed to keep the agency but wanted to cut its budget by $435 million. The changes in the carbon tax repeal bill would enact those cuts and a previously announced deferral of $370 million in funding by the former Labor government. But in this year's federal budget the Abbott government reversed this position and announced it would push to scrap the agency altogether and reclaim $1.3 billion in funding that had not already been committed to projects.

The government has since introduced separate legislation to dissolve the agency, which is now being examined by the Senate's economics legislation committee, which is due to report back on September 4. Senator Muir's proposed amendments seek to block the initial budget cuts to ARENA that are contained in the carbon tax repeal bill. If the move is successful, the opposition, Greens and cross bench will save much of the environment infrastructure of the previous government. Loading The Palmer United Party has already promised to preserve the Clean Energy Finance Corporation, the Climate Change Authority and the renewable energy target but it will vote to abolish the carbon tax.

New details have also emerged about the PUP's plan to introduce a 300-page amendment to trigger a move to an emissions trading scheme when five of Australia's major trading partners take action on climate change.