Anthony Albanese had yet to secure a deal to rewrite federal environmental laws ahead of the final day of this year's parliament, leaving long-promised reforms in danger of collapsing for the second time in 12 months.
But sources in the political, industrial and environmental movements expect the Greens to ultimately accept an 11th-hour compromise after Labor offered new concessions to win minor party support.
The government was locked in tense negotiations with the Greens and the Coalition on Wednesday as it races to meet a self-imposed deadline for reviewing the Environment Protection and Biodiversity Conservation (EPBC) Bill before Parliament's summer recess.
Prime Minister Anthony Albanese has taken part in the talks, speaking directly to his Green Party counterpart Larissa Waters in an attempt to resolve the standoff.
Albanese's active role in bipartisan negotiations on legislation is usually a sign that negotiations have reached a sticky end.
Government sources confirmed that no deal had been reached as of Wednesday evening.
As of Wednesday evening, the Prime Minister had yet to hold leadership talks with Susan Ley, although Environment Minister Murray Watt was speaking again to his Liberal colleague Angie Bell.
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Watt's meeting with Bell indicated that the government remained open to a potential deal with the Coalition, although this option was considered less likely after Ley criticized the Labor Party proposal as “totally insufficient”.
Guardian Australia understands the opposition demanded more business-friendly changes on Wednesday, further complicating prospects of a last-minute deal between the major parties.
After an initial package of concessions, including measures to effectively prevent the accelerated development of coal and gas projects, failed to sway the Greens, the government on Wednesday proposed further changes to the minor party.
Guardian Australia has not seen the revised proposal and neither the Greens nor the government have confirmed details of the updated proposal.
The Green Party chamber met on Wednesday to discuss the position.
Inspired by Graham Samuel's review of the EPBC Act in 2020, the Bill promises to improve the protection of nature through new environmental standards, as well as speed up the assessment of projects.
It will also create a new environment agency, a promise made to the Labor Party at the last two federal elections.
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The bill was heavily criticized from all sides. Environmentalists warn it will fail to adequately tackle the extinction crisis, while industry fears features, particularly proposed new “unacceptable impacts”, could hamper projects.
If Labor fails to reach a deal on Thursday, it will be the second time in 12 months that planned reforms to the EPBC Act have been taken off the table.
During the last term of parliament, former environment minister Tanya Plibersek proposed a piecemeal approach to reform and introduced legislation to create an environmental agency.
But with Plibersek on the verge of an agreement with the Greens and independent senator David Pocock, the prime minister vetoed the bill after pressure from the Western Australian government and the mining sector.
Albanese decided not to revive the bill ahead of the federal election in May, postponing the reform task until he returns to power.
In an email to supporters on Wednesday, the Lean Environment Action Network (LEAN), which has been campaigning for years to fix the EPBC Act, said it would prefer the government team up with the Greens.
“The Greens' proposal includes most of LEAN's key demands and we hope this will be the way forward. The Coalition's proposal, while clearly inferior, does not catastrophically weaken Labor's bills,” the email said, seen by Guardian Australia.
“We remain positive, although understandably nervous, and we know many of you feel the same.”
