Agriculture Minister Barnaby Joyce denies he ever told dairy farmers he was open to a levy on milk - but he's not ruling the measure out entirely.
Independent senator Jacqui Lambie claims Mr Joyce told a farm lobby group he would support a dairy levy if Labor also supported it.
"I said all issues are on the table - I'm willing to consider that - but I never said I would back one," Mr Joyce told reporters in Brisbane on Monday.
Mr Joyce met with lobby group Farmer Power last week about solutions to the dairy crisis.
The group suggested a temporary levy on drinking milk to top-up prices paid to struggling farmers reeling from retrospective cuts from processing giant Murray Goulburn.
In a communique released after the meeting, Farmer Power said the minister was ambivalent on the proposal but indicated it would need bipartisan support.
Senator Lambie jumped on that as an indication the government was warming to the idea.
She's vowed to move for a Senate inquiry into the crisis.
