Deputy Queensland Premier Jackie Trad has stepped up the government's attack on One Nation, saying granting it political legitimacy isn't "in anyone's economic interest".
The Palaszczuk government has pledged to preference the divisive, anti-Islam party of Senator Pauline Hanson last at the next state election, due by 2018.
Senior ministers have also sought to highlight the LNP's apparent willingness to leave the door open for One Nation preference deals.
Ms Trad told a Queensland Media Club lunch on Friday that mutual understanding and respect were key to attracting foreign investment.
"Protectionist economic populism" succeeded in politics when economic security was uncertain, she said, as evidenced by the rise of the Katter's Australian Party, Clive Palmer's party and One Nation.
Ms Hanson's repeated electoral defeats over almost two decades correlated with an "extended period of economic growth and certainty", Ms Trad argued.
"It is not in anyone's economic interest for political leaders to provide political legitimacy to any extreme group.
"I am not saying that voters who support One Nation or KAP should be ignored.
"What I am saying is that the LNP duchessing a political organisation with protectionist and xenophobic views will damage our economy."
Ms Trad accused the LNP of compromising foreign investment through moves to re-regulate the sugar industry, harming the state's reputation in Asia.
She pledged her party would promote economic stability, jobs growth and social inclusion.
Ms Hanson won a Queensland senate position this year, ending 18 years in the political wilderness, and now leads a team of three others in the upper house.
She frequently courts controversy with her divisive views on Islam, calling for a royal commission into whether it is an ideology or a religion and advocating for a ban on building new mosques.
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