Prime Minister Tony Abbott could intervene to prevent the foreign takeover of Australia's largest agribusiness despite support for the bid by his Liberal colleagues.
Treasurer Joe Hockey needs to make a decision about a $3.4 billion bid by US food giant Archer Daniels Midlands for GrainCorp (GNC) by December 15.
Coalition figures say Mr Abbott is inclined to say no to the purchase or make conditions so onerous as to make it unviable, The West Australian said today.
The takeover is being opposed by The Nationals, some rural Liberals and eastern wheat-belt growers.
But WA Liberal senator Dean Smith, like others in the nation's biggest wheat-growing state, is backing the ADM bid.
"This deal ... ticks a lot of boxes for the 21st century," he told parliament yesterday.
Australia was a big exporting country and needed the "absolute best infrastructure" and best global connectivity.
"We need competition - this is the absolute imperative that underscores everything."
Senator Smith said debate about foreign investment should not be used as a Trojan horse by those seeking to reverse the benefits of deregulating the wheat export market.
He rejected claims by opponents of the sale that GrainCorp operated a grains handling and export monopoly on the east coast.
"This is simply wrong."
More than half of the east-coast harvest bypassed GrainCorp's export supply chain while there was a score of export buyers and its bulk port facilities had four competitors.
As well, the $40-60 million investment ADM was committed to was far larger than GrainCorp could make, Senator Smith said.
GrainCorp and ADM executives are expected to appear before a resumed Senate inquiry into the takeover.
Liberal senator Bill Heffernan has vowed to ask "difficult" questions.
"The debate so far has been informed by lobbyists with work-shopped words and a series of lunches," he told The West Australian.