THE Federal Government will lose crucial support from a high-profile group of environmental, union and welfare lobbyists if it caves in to Opposition demands to water down its emissions trading legislation.
The Southern Cross Climate Coalition - which includes the Australian Conservation Foundation, Climate Institute, World Wildlife Fund, Australian Council of Social Service and ACTU - has written to Prime Minister Kevin Rudd warning its support will disappear if the legislation is made ''ineffective or irresponsible'' by amendments.
Mr Rudd made much of Labor's alliance with the group when it was announced in May, appearing in a joint press conference with ACF executive director Don Henry and others to spruik his environmental credentials.
But the letter, which was also sent to Opposition Leader Malcolm Turnbull and cross-bench senators Nick Xenophon and Steve Fielding, warns that big polluters should not be offered further concessions.
''It's not effective or responsible to give windfall gains to booming coalminers or to give billions extra to businesses who bought brown coal-fired generators knowing a carbon price was coming,'' the group's spokesman, John Connor, said.
''We've made it clear to the Prime Minister and Malcolm Turnbull to say these industry proposals would make the [carbon pollution reduction scheme] ineffective and unsupportable,'' he said.
Loss of support from the high-profile group would be a significant blow for Labor, leaving it facing widespread hostility from environmental, welfare and union groups, with only parts of the business community onside.
Labor has challenged Mr Turnbull to produce by mid-October a list of amendments necessary to win Coalition support to pass the scheme in the Senate.
Opposition emissions trading spokesman Ian Macfarlane said the amendments centred on three concerns: the treatment of energy-intensive trade-exposed industries; the treatment of agriculture; and cost increases for power generators and suppliers.
They will almost certainly involve significant added concessions to coal-fired power generators, farmers and energy-intensive exporters such as aluminium producers.
But Mr Macfarlane conceded that offering greater concessions to some groups would place a bigger burden on households to deliver specific targets for emission reductions.
''These's a whole lot of juggling to be done,'' he said.
Amid significant hostility from within his own ranks, Mr Turnbull last week appeared to stake his leadership on the issue, warning he was not prepared to lead a party that did nothing to amend Labor's legislation. But delivering the amendments on time and with broad consensus from the Coalition party room is likely to prove a difficult task.
Mr Macfarlane said he would meet with business groups and companies and present a ''rough framework'' to the shadow cabinet on Wednesday. A list of amendments would then be drawn up and presented to Coalition MPs amid ongoing negotiations with Mr Rudd and Climate Change Minister Penny Wong.
The amendments are scheduled to be presented back to Coalition MPs for a final vote on October 20, before a Senate vote in November.