Katters Australian Party has referred Queensland Premier Annastacia Palaszczuk and three members of the opposition, including its leader, to the corruption watchdog after its staff were axed.
Ms Palaszczuk will take away four staffers granted to the minority party during the last term of government after it backed federal KAP Senator Fraser Anning's inflammatory speech to federal parliament.
Senator Anning used the Nazi-associated phrase "final solution" and called for a ban on Muslim immigration.
But KAP Queensland leader Robbie Katter says Ms Palaszczuk may have broken the law when she threatened to cut staff if the party did not condemn Senator Anning's remarks.
"The premier should stand down during the time this is being investigated and the decision should be shelved while this is investigated," Mr Katter said on Tuesday.
KAP says the Premier's move will undercut how well the party can represent the people who elected its members to parliament.
Liberal National Party Leader Deb Frecklington, Deputy Leader Tim Mander and LNP frontbencher Ann Leahy have also been referred to the Crime and Corruption Commission.
Mr Katter said he had referred the LNP members because they had been instrumental in forcing Ms Palaszczuk's hand by calling on her to act if he did not denounce Senator Anning's inaugural speech.
He is confident he is making the right choice in standing by Senator Anning despite the fallout that decision has created for his party.
"I don't have a defined end game here, I just think if someone has acted outside (the rules) and it impacts us, we're going to do something about it," Mr Katter said.
The Premier said on Monday she wasn't worried about any CCC referral.
"It's not in breach. (The funding) is totally at my discretion," she said.
Funding for the four KAP staffers is understood to run out on Friday.
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