Labor says the nation's clean energy bank will be left to fund "flying saucers" after being told by the government not to invest in wind energy projects.
The $10 billion Clean Energy Finance Corporation (CEFC) has been ordered to focus on new technologies instead of wind farms under a revised mandate drafted by the government.
The government says the change is not new but came as part the deal over the renewable energy target reached with Senate crossbenchers in June.
Prime Minister Tony Abbott believes it will provide certainty for the sector.
The plan was always to abolish the corporation entirely, he said.
"But while it exists, we believe we should be investing in new and emerging technology - certainly not existing wind farms," he told reporters in Darwin on Sunday.
The opposition mocked the move, accusing the government of sabotaging the future of renewable energy industry.
"The guidelines now being proposed ... mean that the only thing the CEFC can invest in is flying saucers," Labor leader Bill Shorten said.
"Because anything which is any closer to development Mr Abbott is saying is an established technology."
Environment Minister Greg Hunt lashed out at reports he was left out of the decision, denying it was made without his approval.
He says he approved it with Finance Minister Mathias Cormann.
"Claims that I have been angered are a complete, absolute and utter fabrication," he tweeted on Sunday.
The Australian Greens branded the change a "vindictive form of industrial sabotage".
Wind farm groups said the "senseless" decision would be the final nail in the coffin for the industry.
The Clean Energy Council said having an overt directive against wind investment would affect the nation's ability to attract jobs and investment.
Mr Abbott has previously said he found wind farms "visually awful" and noisy.
