THE stoush between federal Resources Minister Martin Ferguson and Independent MP Rob Oakeshott is just another example of a "divided and dysfunctional" Labor government, says Opposition Leader Tony Abbott.
Mr Ferguson accused Mr Oakeshott of making a "baseless attack" on his integrity in a newspaper article and had begun a legal action against him.
But after a chat with Prime Minister Julia Gillard early on Saturday morning, the defamation case was dropped.
Mr Abbott said the matter was further evidence of a chaotic government.
"Apparently the prime minister has been giving Martin Ferguson his instructions and it seems to be just further evidence of a divided and dysfunctional government," he told reporters in Melbourne.
"(The government) seems to be fighting with everyone and this is just more evidence of that."
Mr Ferguson said in a statement released on Saturday that he had intended to settle the matter privately with Mr Oakeshott.
"It was always my intention and expectation that this matter, so far as it directly concerns Mr Oakeshott, would be settled privately without the need for any public disclosure," he said.
"Consistent with my initial expectation, I will not pursue legal action against him."
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