The former Liberal leader said the coalition must "stand up for something" and in particular oppose the Federal Government's emissions trading plan.

More than a dozen Liberals got up and backed Mr Nelson, challenging their leader Malcolm Turnbull's willingness to do a deal with the Government.

It also prompted Nationals war-horse and coalition champion, Senator Ron Boswell, to get to his feet and passionately advocate his own party's rejection of the Government's ETS - and warn the Liberals they could "no longer take the Nationals for granted".

Emboldened at what they had seen in the joint party room, Boswell and several of his Nationals colleagues went public the next day with the same message.

It was a very public shot across the coalition bows, and reflected two years of simmering discontent among the Nats with their coalition partner.

The reasons for the incendiary situation lie in what's happened since the coalition went into opposition almost two years ago.

Within the Nats, there have been big changes at the top.

While Warren Truss, an old-style coalitionist, took the leadership, it was the party's Senate team that took on a much more "bolshie" complexion - outspoken Barnaby Joyce and feisty Fiona Nash took the leadership reins, with Boswell and new NSW hard-nut John "Whacker" Williams there for support.

Some big policy issues have also inflamed things. The first was Labor's plan to scrap the single desk for wheat exports.

This was "sacred cow" territory for the Nats, but the Libs sided with the Government.

The Nats were aghast. As one said: "With John Howard, we could always go to his office and work something out. He agreed to give the single desk another chance, even when he was inclined to let it go. But that's all changed now."

Similarly, the Libs didn't raise a whimper when the Government scrapped a $2.4 billion regional communications fund which the Nats had won in return for supporting John Howard's sale of Telstra.

Then came the tax breaks for carbon sink forests, again supported by the Libs.

Several Nats Senators split from the Libs and crossed the floor, a move which cost Senator Nash her job as shadow parliamentary secretary.

And now emissions trading is the issue that could well break the "camel's back" of coalition unity.

From day one, the Nats have opposed the Government's plan, warning the bush would be hit hard with extra costs and job losses.

They looked on with dismay as the Liberals flip-flopped from one position to another, initially voting down the Government's plan, then putting up an alternative, then saying they would negotiate.

"We thought we had an agreement to do nothing until we knew what other countries were doing," a well-placed Nats source said.

"And then we got all this. There's a lot of very upset people in the party.

"It's the most serious threat to the coalition we've had."

A lot of anger has centred on Mr Turnbull, a "north shore" Liberal who's the antithesis of what the Nats stand for.

"He doesn't consult, he lacks authority in his own party, and by prevaricating on the ETS, he's made the coalition the issue, not the Government," a Nats insider said.

While stopping short of calling the ETS a coalition "breaker", Senator Joyce says it was an "extremely serious" situation.

"We've bitten our tongue on a few things, but not on this. It goes to the essence of local economies."

Even Mr Truss says there would have to be "radical changes" to the Government's plan before the Nats would consider it. Swinburne University politics professor Brian Costa said the Nats should leave the coalition.

"There's no disadvantage doing this in opposition, especially when the Libs are so divided" he said.

"The coalition's heading for a belting next election, so the Nats may as well split and go hard to lift their profile in the bush.

"They shouldn't flirt with 'Woollahra liberalism', that's not going to sing for them in Scone or Goondiwindi."