The Queensland Government has indicated it will not become a bank guarantor for Clive Palmer’s troubled Townsville nickel refinery.

The federal MP wants the State Government to provide security for a $35 million loan to keep his Queensland Nickel refinery near Townsville afloat.

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Mr Palmer met with the Queensland Treasurer on Tuesday, requesting help to keep the Yabulu smelter open.

Mr Palmer previously said Queensland Nickel had a cash flow deficit, but reiterated the company could trade its way out of trouble.

Treasurer Curtis Pitt said he would prefer to consider other forms of help including payroll tax deferral.

“It is the Queensland Government’s view that providing direct assistance including via bank guarantee, presents an undue risk to the state and creates a precedent,” he said.

“It is the Government’s firm view that Queensland Nickel and its shareholders should take direct responsibility for resolving Queensland Nickel’s current financial issues, ensuring the future of the Yubulu refinery without further delay.”

Mr Pitt said the Government’s main concern was for the employees.

“Our thoughts are with the 800 workers who through no fault of their own have no guarantee about their job security weeks out from Christmas,” he said.

“Mr Palmer has a political, professional, business and moral obligation to support workers at Yubulu.

“Mr Palmer cannot continue to avoid the media and he must immediately start communicating faithfully with the local workforce.”

Mr Palmer did not comment when contacted by the ABC.