Senior Liberal minister Christopher Pyne urged the Nationals to consider the message of disunity they were sending to the community but NSW Nationals senator John Williams responded: "Tell someone who cares."

The Greens, who along with Labor, the minor parties and independents were expected to co-sponsor Senator O'Sullivan's bill, suddenly withdrew their support on Tuesday, six days after Senator O'Sullivan released a draft of his bill including wide-ranging terms of reference.

Th Greens argued the terms of reference should also include an examination of executive remuneration, political donations, the "vertical integration" of wealth management and financial services, and the too-big-to-fail, taxpayer-funded guarantee.

Notice of motion

In order to build a consensus, Senator O'Sullivan had modelled his bill on a private member's bill previously proposed by the Greens that has passed the Senate and has been stuck in the lower house.

Senator Barry O'Sullivan plans to forge ahead with his private member's bill in the Senate. Alex Ellinghausen

As of late Tuesday, he was not disposed to accommodating the Greens' latest demands and will move a notice of motion on Wednesday calling for debate to begin as soon as the Senate passes same-sex marriage legislation. That could be as early as Wednesday afternoon.

One Labor source accused the Greens of doing the same to the commission of inquiry as they did to Kevin Rudd's Carbon Pollution Reduction Scheme – opposing it because it was imperfect.


Another claimed the Greens did not want the Nationals to get the credit for the inquiry.

Greens leader Richard Di Natale said "we don't want a Mickey Mouse inquiry" and he accused the Nationals of being motivated by wanting to destroy Mr Turnbull rather than genuinely probe the banks.

If the Greens refuse to support the bill, Senator O'Sullivan will need 36 votes out of the 71 senators currently present. Labor Senator Gavin Marshall is overseas for the rest of the year and there are four vacancies due to people being disqualified for dual citizenship ad not yet being replaced.

The three Nationals backbenchers, 25 remaining Labor senators, three members of One Nation, two NXT senators, Derryn Hinch, LUcy Gichuhi and Fraser Anning all support the inquiry, totalling 36 votes.

David Leyonhjelm opposes the inquiry while Cory Bernardi is undecided. Another scenario shows Senator O'Sullivan could need 37 votes.

In the Lower House, another Nationals MP, apart from Llew O'Brien and George Christensen who have already promised to support the bill, would need to cross the floor if the Greens' Adam Bandt voted with the government.

'Disunity is death'

Lobbyists including the Insurance Council of Australia met Senator O'Sullivan as the government wheeled out senior figures to try to ward off the push.


Nationals ministers Matt Canavan and Darren Chester decried the inquiry as unnecessary and doubted it would receive majority support to become official policy when debated in the Nationals' party room on Monday.

That, however, would not stop backbenchers in either house from crossing the floor.

Mr Chester argued the government had already taken action and a commission would be waste of taxpayers' money and a lawyers' picnic.

Mr Pyne said the rebel push would inflict further damage on the government.

"My message to all my colleagues is that disunity is death and if anyone thinks they are going to do well by creating disunity, they don't do so," he said.

"I can tell you that when parties are disunited, they lose."

'Focus on results'

Mr Turnbull said there was no need for a commission because the government had already implemented several measures to better regulate banks and guard against bad behaviour.


"We have put more money into the regulators to give them stronger teeth and more effective powers and of course we are setting up the one-stop shop, the Australian Financial Complains Authority, which will mean that people will have one place to go to for help and assistance with complaints and concerns with their financial service providers," he said.

"We are constantly working to ensure that the cultural change in the banks occurs and we are getting strong support for that.

"Our focus is on results. It is on action. That is why we have not supported a royal commission. If we had set up a royal commission into banks two years ago, none of the reforms that we have undertaken would have been able to be achieved."

Deputy Liberal leader Julie Bishop said Senator O'Sullivan's inquiry would offer false hope while threatening confidence in the banking sector.

"We need a robust and strong banking and finance sector and we need to project that reputation around the world," she said.

Turnbull's tactics questioned

Queensland Liberal senator Ian Macdonald said a commission would achieve nothing. But he questioned whether Mr Turnbull would ever resonate with Queensland voters.

"There's no doubt about it – Malcolm is not seen as representing people in northern and regional Queensland," Senator Macdonald told Sky News on Tuesday.


"They see him as a city person with city values. I know that is not right but there is quite frankly a lot of work to be done."

Senator Macdonald did not support changing leaders but said Mr Turnbull needed to switch his focus.

"With Abbott and Howard, people knew what they stood for.

"Malcolm is a very intelligent bloke, he's very committed, he has a great vision, but it doesn't come across."

He said Mr Turnbull sought to appeal to people who were never going to vote for the Coalition, which was driving voters to parties such as One Nation.

"[For] the traditional people ... the issues we seem to be supporting are not the issues they want."