Queensland's cabinet has quashed the controversial deal offering Adani a royalties holiday for its $16 billion Carmichael coal mine.
In a major backflip, bringing a week of Labor factional warring to a close, Premier Annastacia Palaszczuk said the Indian mining giant would have to pay "every cent" of royalties for the proposed mega mine.
Ms Palaszczuk and Treasurer Curtis Pitt were forced to devise an alternative scheme after her initial plan to cap Adani's annual royalties payments drew criticism from all angles and also divided cabinet.
Ministers attended a snap cabinet meeting late on Friday afternoon and unanimously agreed Adani would pay all royalties, the premier said in a statement.
She said there would be a new policy approach for projects in the Galilee and Surat Basins and the North West Minerals Province, details of which would be released in "due course".
"There will be no royalty holiday for the Adani Carmichael mine," Ms Palaszczuk said.
The decision is set to further antagonise Adani, which said it would analyse the details of the government's arangements.
"Adani confirms again that it will pay every cent of royalties to the state as was always the case," the company said in a statement issued on Friday night.
The company was quick to defer a decision on its final investment, set down for a board meeting on Monday, when cabinet failed to follow through on the so-called "royalties holiday" deal this week.
Under the agreement, struck in India in March by Guatam Adani and Ms Palaszczuk, Adani would only have to pay $2 million annually over the first seven years of the mine's operation.
It could have cost Queensland taxpayers up to $320 million.
The deal sparked a massive backlash within the Labor party as well as from the federal government and regional councils.
Ms Palaszczuk and Mr Pitt had spent the week attempting to devise a plan that would satisfy both Adani and Labor's powerful Left faction, led by Deputy Premier Jackie Trad.
Both the Left and the majority of Mr Pitt's own Old Guard faction opposed the initial proposal.
Queensland Resources Council chief executive Ian Macfarlane earlier on Friday told a Mackay audience previous governments had burdened the industry through significant royalties increases.
"It is vital that any changes to the state's royalty system improves the competitiveness of the resources sector," he said.
"Queensland's royalty regime is uncompetitive by global standards so we look forward to seeing the government's proposal."
The government's plan to financially back the $16 billion mine has rubbed off poorly with voters, according to a ReachTel poll released on Friday.
A majority - 58.8 per cent - of the 1618 Queenslanders polled were either opposed or strongly opposed to such financial support.
LNP leader Tim Nicholls criticised the government for delaying the mine's go-ahead with in-fighting, saying the last week had been marked by "crazy leaking" from all factions, and doubted the hard-line stance would stick next week.
"(It's) a party that's at war with itself, a government that can't come up with a policy on Friday and stick to it by Monday," he said.
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