The resignation of Glenn Lazarus from the Palmer United Party has put another thorn in the side of the Abbott government.
But Prime Minister Tony Abbott says it's business as usual.
Senator Lazarus, the PUP's leader in the upper house, on Thursday night announced he would sit as an independent.
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The decision follows a falling out with PUP founder Clive Palmer and the sacking of his wife Tess from a party job.
It leaves PUP with just one senator - Western Australia's Dio Wang - and means the government now has to negotiate separately with all eight Senate crossbenchers in order to get six of them on side to pass legislation.
"The challenge for the government is the same now as it was before," Mr Abbott told ABC radio.
"It is to talk in good faith to all of the Senate crossbenchers."
Labor leader Bill Shorten said he respected Senator Lazarus and looked forward to working with him as an independent to defeat the government's university changes in parliament next week as well as other unpopular budget measures.
The fate of the higher education bill is also on Government Senate leader Eric Abetz's mind.
He will attempt to contact senators Wang and Lazarus on Friday to talk about their stances.
Education Minister Christopher Pyne admitted on Friday he had never personally met with Senator Lazarus.
Mr Shorten said there had been many twists and turns in the "Clive Palmer show", but Labor would deal with each senator on the merits of each issue.
Independent senator Nick Xenophon says the departure of Senator Lazarus will make it more difficult for the government.
"Previously, government ministers could have dinner with Clive at the Wild Duck, or wherever they went, and now it's just that little bit more difficult," Senator Xenophon said.
Tasmanian independent Jacqui Lambie, who previously quit PUP, said Senator Lazarus had a clear agenda.
"Glenn's resignation means that the average workers, the sick, our pensioners, the uni students and disabled will have even more protection in the Senate from this Liberal government, which wants to take away so much," she said.
Senators Lambie and Lazarus have been critical of the coalition's negotiation methods.
"The only person making it more difficult is Eric Abetz," Senator Lambie said.
"I think it's about time they had a look at their Senate leader - he creates problems."
Mr Palmer, who holds the Queensland lower house seat of Fairfax, denied his party was a spent political force.
Senator Lazarus' decision - delivered by text message on Thursday night - had been triggered by the party sacking his wife Tess, Mr Palmer said.
But Senator Lazarus said it had "absolutely nothing" to do with his wife's sacking, but rather the fact that Mr Palmer had not been able to create a "team environment".
Liberal Democratic Party senator David Leyonhjelm said there was a suspicion Mr Palmer had been taking an interest in Senator Lazarus's seat because he felt powerless in the lower house.
"That's probably not likely to happen now," Senator Leyonhjelm said.
Watch: Michelle Grattan on Lazarus' defection
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