Queensland Premier Annastacia Palaszczuk is under huge pressure to placate both her Labor factional rivals and mining giant Adani over the stalled Carmichael mega mine.

A proposed deal to give Adani a “royalties holiday” has exploded in her lap with the party’s Left opposing it and the Indian company putting the project on ice.

Amid opposition taunts that the government was in the middle of a “civil war”, Ms Palaszczuk was forced on Tuesday to dodge questions over her leadership in state parliament.

It’s understood she struck the deal at a meeting with Gautam Adani in India in March, which would have seen the company pay as little as $2 million in royalties annually in the first seven years of the mine’s operation.

It would cost Queensland taxpayers up to $320 million.

The deal was not vetted by cabinet, which revolted when it found out, with the powerful Left led by Deputy Premier Jackie Trad, calling for the deal to be reworked as it contravened a pre-election promise.

Cabinet’s delay in making a decision on the proposal on Monday afternoon was slammed by the federal government, the LNP state opposition, regional mayors and Adani itself.

Question time on Tuesday morning was dominated by the issue with Opposition Leader Tim Nicholls taking repeated pot-shots and stressing the episode had called the premier’s leadership into question.

“Isn’t this a divided cabinet and the fact that thousands of jobs lie in the balance, a failure of leadership?” Mr Nicholls asked the premier.

“Yesterday was a test of the premier leadership and she failed.”

Ms Trad maintained her position while also supporting the premier, repeating that she was a member of the “Palaszczuk Labor government”.

“The premier has been strong and clear – this will go through a cabinet process and there will be a framework going forward,” she said.

Ms Trad and the Left have argued a royalties holiday contravenes the party’s pre-election promise not to provide taxpayer subsidies for Adani.

Fellow Left member, Energy Minister Mark Bailey, refused to declare his support for the mine saying he was “very committed to us keeping all of our election commitments”.

Another, Shannon Fentiman, gave qualified backing, hoping it would deliver the 10,000 jobs promised “as long as it meets all its environmental standards”.

Adani, incensed at cabinet’s delay of the royalties submission, has deferred Monday’s board meeting set down to make their final investment decision.
A spokesman told AAP they were willing to wait but not indefinitely.

Federal Resources Minister Matt Canavan says the state government’s indecision is risking thousands of jobs, calling it “a remarkable and embarrassing situation” that no tax regime was in place.

Townsville Mayor Jenny Hill says if the Adani project doesn’t go ahead, it will set the state back 50 years.