Jacqui Lambie has quit the Palmer United Party.

Senator Lambie made the widely expected announcement to the Senate on Monday morning. A bitter dispute with Palmer United Party leader Clive Palmer has seen the pair publicly trade blows for the past week.

Senator Lambie told the Senate she had no time for "mud-slinging" and apologised to voters in her home state of Tasmania for the uncertainty the divisions had caused.

She said her resignation, effective immediately, left her free to negotiate with the government over the scaling back of the renewable energy target and the abolition of the Clean Energy Finance Corporation, moves which the former PUP bloc of four had sought to block.

Senator Lambie said she would "never vote" for the government's proposed changes to higher education fees or for a GP co-payment.

Senator Lambie used her address to the Senate to call on Prime Minister Tony Abbott to reconsider a below-inflation pay rise for the Australian Defence Force.

It was Senator Lambie's outspokenness on the subject in recent weeks that proved the catalyst for her split with the Palmer United Party.

"I also take this opportunity to plead with the PM to reconsider his unfair pay offer to the men and women of Australia's Defence Force," Senator Lambie said.

"He has made a terrible mistake which fundamentally undermined Australia's national security."

Senator Lambie said Australians would "forgive" Mr Abbott if he allocated an extra $121 million to increase the offer and restore Christmas leave and travel entitlements for defence personnel.

Senator Lambie said being a member of the PUP had prevented her from voting in the Senate in a way that she felt was best for Tasmanians and used her closing remarks to address public criticism from Mr Palmer.

"I don't have the time or the energy to be drawn into a political mud-slinging contest," she said.

"I will not be drawn into the game of responding to hurtful and false personal attacks."

Senator Lambie said that after the political dust had settled there would still be opportunities for the former PUP bloc to work together "in the national interest".

Lambie won't achieve much as senator: Palmer

Mr Palmer told Fairfax Media on Monday that Senator Lambie had pre-empted any action being taken by the party by resigning.

"There were certain procedures under way which Jacqui was aware of," Mr Palmer said.

"Rather than have that continue, we think she's preempted the party."

Mr Palmer said Senator Lambie's departure was a "welcome thing for us" and the party could now focus on bringing "forward our own policies for Australia".

"I think you can understand that it's a good outcome for the party because her views are in conflict with what the people who elected her care about," he said.

"I don't think she'll achieve very much as a senator generally."

He attacked Senator Lambie's public persona as a champion for Tasmanians.

"She's not brought one proposal for veterans or Tasmania to the party room in the six months she's been here," Mr Palmer said.

Split has implications on government negotiations

The split has significant implications for the government's ability to negotiate with the cross bench.

Before Senator Lambie's announcement on Monday morning, independent senator Nick Xenophon said the government and opposition would have to work harder to gain the support of cross benchers.

"All that has happened now is that there's going to be a more fluid situation in the Senate," Senator Xenophon said.

"That means that the government and the opposition have to work that little bit harder to convince cross bench colleagues in terms of the merits or otherwise of legislation because instead of dealing with one bloc of four, they'll need to deal with the three groups of people."

Despite the reduction in his voting bloc, Mr Palmer claimed he was still central to voting outcomes in the Senate and still had an agreement for support from the Australian Motoring Enthusiast Party.

"We're still within the balance of power," he said.

"We've got the biggest party within that group of eight."

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