Greens leader Christine Milne says her party's agreement with Labor is effectively over, citing a string of Government policies including its refusal to redesign the mining tax.
In a speech to the National Press Club in Canberra, Senator Milne says it has become clear that Labor no longer has the "courage or the will" to work with the Greens on a shared national agenda.
"Labor has effectively ended its agreement with the Greens," Senator Milne told the audience.
"Well so be it.
But we will not allow Labor's failure to uphold the spirit of our agreement to advance the interests of Tony Abbott.
"We will not walk away from the undertakings we gave not only to the Prime Minister, but to the people of Australia, and that was to deliver confidence and supply until the Parliament rises for the election.
"The Greens will not add to the instability that Labor creates every day for itself." While her announcement will add to the air of instability that often surrounds the minority Government, Senator Milne's decision to guarantee confidence and to continue passing budget bills means the current parliament will continue until the election, due on September 14.
A spokesman for Prime Minister Julia Gillard has released a one-line statement in response to Senator Milne's speech.
"This is a matter for Christine Milne and the Greens.
We will always be the party that puts jobs, growth and work first." Deputy Prime Minister Wayne Swan says the Greens have opposed several pieces of Government legislation over the past couple of years, and he does not think the decision will affect how Parliament operates.
He told reporters at the Australian Workers' Union national conference on the Gold Coast that Senator Milne's decision highlights the fundamental differences between the two parties.
"The Greens want to abolish the mining industry.
That's right over on the fringe," he said.
"The Labor Party and the Greens are cut from a different cloth.
We don't pander to special interests on our left or on the right." Powerful union figure Paul Howes, who has publicly urged Labor to distance itself from the Greens, has also played down the end of the formal alliance.
"So what? I mean, the Greens haven't been supporting a whole range of Labor's initiatives in the Parliament," he told reporters at the Australian Workers' Union national conference on the Gold Coast.
"There are numerous pieces of legislation in the Senate and in the House that the Greens have voted against.
"Frankly, if Christine Milne wants to rip up an agreement? Excellent." Speech 'changes nothing' Liberal Senator Eric Abetz says despite Senator Milne's speech, the Greens will continue to prop up the Labor government through their guarantee of confidence and supply.
"Senator Milne's diatribe at the National Press Club today adds to the chaos surrounding this Government, but in reality nothing has changed," Senator Abetz said in a statement.
"The Greens have worked out how toxic the Labor brand is and are trying to distance themselves from it." After the 2010 election, the then-Greens leader Bob Brown signed an agreement with Ms Gillard which helped Labor remain in office.
But the relationship between the two parties has been strained by a string of policy disagreements, most recently the push by the Greens to overhaul the mining tax .
Senator Milne says Labor has walked "into the arms of big miners" at the expense of ordinary Australians.
"What is going on when a Prime Minister and a Treasurer get in a back room with three mining companies and stitch up a deal and take it to the Parliament, and say that the elected representatives of that country can't amend that deal?" Ms Gillard, along with Treasurer Wayne Swan, renegotiated the mining tax with BHP Billiton, Rio Tinto, and Xstrata, soon after replacing Kevin Rudd as prime minister in 2010.
Senator Milne says she spoke with Ms Gillard shortly before today's speech to warn her of what she was planning to say.
Independent MP Andrew Wilkie made a similar decision to end his formal relationship with the Government early last year, over a disagreement with Labor over plans to impose new restrictions on poker machines.
Mining anger Senator Milne used her speech to launch an attack on the policies of both Labor and the Coalition, and to argue for the re-election of the Greens.
"Without the Greens holding the balance of power in the Senate, Australia risks the repeal of the mining tax - giving up on any chance of the Australian community receiving its fair share of the bounty of our mineral wealth," she said.
"We risk farmers being driven from their land by mining companies, without any resistance from the Parliament." She has questioned how Ms Gillard and Opposition Leader Tony Abbott can voice support for Australia becoming a "food bowl", but at the same time support coal seam gas mining projects on agricultural land.
And Senator Milne fired another broadside at Environment Minister Tony Burke, describing his decision to reject a proposal to list Tasmania's Tarkine wilderness on the National Heritage register as "pathetic".
"Minister Burke sold out the Tarkine to mining interests at the behest of New South Wales right [faction], Paul Howes." "Only the Greens are standing up for the Tarkine - the largest tract of temperate rainforest left in Australia." In March last year tensions between Labor and the Greens spilled over after Ms Gillard's described them as a "party of protest" which rejects the "moral imperative to a strong economy".
"The Greens will never embrace Labor's delight at sharing the values of every day Australians, in our cities, suburbs, towns and bush, who day after day do the right thing, leading purposeful and dignified lives, driven by love of family and nation," Ms Gillard said at the time.
Former Senator Bob Brown fired back, accusing the Prime Minister of "unfortunate and gratuitous" insults against the Greens which will "come back to bite her".