Federal Member for Nicholls Damian Drum plans to break away from party policy and back a "very conservative" approach to giving water back to farmers.
Mr Drum has thrown his support behind Nationals colleague Perin Davey, who plans to present a Private Senator's Bill that would release water back on to the market.
The "flexible approach" for farmers and the environment would see the Commonwealth Environmental Water Holder release half of its water held for consumptive use in severe drought years.
This would contradict party policy, which has supported rules about preserving water for the environment.
Mr Drum said the bill had the "blessing" of the National Party but was not supported by Environment Minister Sussan Ley.
He said she argued there were numerous legalities that would prevent the bill from functioning.
Parliament wrapped things up for the year yesterday but Mr Drum said the aim was to present the bill early next year.
“The best way to do this is to put it into the Senate and then they have the opportunity for some committees to have the legalities checked out,” Mr Drum said.
“She (Ms Ley) has informed us there are problems with the bill, which is code for some uncertain legalities around what we want to do.
“We're still awaiting further legal advice on this bill. If they are problems, we look at other ways around them.
“There might be jurisdictional problems because we could be interfering with the rights of the state, so we have to work out those issues.
“But we may get secondary legal advice that says we have a different level of understanding.”
Mr Drum said he was confident the "intent" of the bill would be passed in parliament but was doubtful about the legalities.
Ms Davey and Mr Drum are supported by Nationals Member for Mallee Anne Webster.