The Nationals leader, Warren Truss, has flagged the end of the federal Coalition with his rump of senators and MPs parting company with the Liberal Party, but party insiders say John Anderson's review will recommend a merger federally and in all states.
While the Nationals and Liberals are moving towards merging into a single party in Queensland, Mr Truss said the prospect of going it alone at a Federal level must be considered.
His view is at odds with that of senior Liberals and other Nationals.
Far from a Coalition split, they are forecasting the two parties in NSW and Victoria, as well as federally, could be merged into a single entity by the end of this year.
"If it happens in Queensland the pressure for it to happen elsewhere will be remorseless," a senior federal Liberal said.
Mr Truss told the Ten Network yesterday that the future of the Coalition would hinge on the outcome of a review into the party's future being conducted by the former Deputy Prime Minister and Nationals Leader John Anderson.
"We're looking at the potential to go it alone, or have a stronger role or a different role within the Coalition," he said.
"All options are on the table, as they ought to be following election defeats."
Asked whether dismantling the Coalition was a possibility, Mr Truss repeated: "All the options are on the table and that's as it ought to be when you're having a look at the future of the party."
Mr Anderson's review is due to be released soon.
Sources believe it will recommend the merger of the two parties in NSW and Victoria, as is happening in Queensland.
One source said it was believed Mr Anderson would recommend The Nationals either merge or face extinction.
But Mr Truss did not appear keen. He said the Liberals and Nationals in Queensland had similar constituencies.
"Certainly in NSW and Victoria the National Party has identified itself much more with rural and regional areas, and each State will have to look at the issues on its merits."
Federally the National Party has been on the decline for years. It now has only nine MPs and four senators.
In NSW State politics the Nationals hold about one-third of the 36 Coalition lower house seats. But rather than any desire to end the Coalition, the State parties are expected to merge.
If such a merger happened federally it would vindicate the Federal Opposition Leader, Brendan Nelson, who in March staked his leadership on it occurring.
The Queensland merger depends on the result of a postal ballot of members, now under way, on merging into the Liberal National Party of Queensland.
If the ballot shows members support it, both parties will use constitutional conventions scheduled for the end of July to agree on a constitution for the new party.
The former Federal Minister Mal Brough, who lost his seat at the last election, was elected Queensland Liberal Party president at the weekend.
He said yesterday that he supported the merger, but wanted to make a few changes that might cause a small delay.
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