West Australian mining leader and Fortescue Metals chief Andrew Forrest has raised stakes in the debate over the new mining tax, stating that Treasurer Ken Henry said privately the tax will not take effect if it was revised.

He also criticised Prime Minister Kevin Rudd for claiming that the mining industry's arguments over the tax are “bunkum.”

In an interview with ABC Local Radio today, Mr. Forrest said that the Treasurer said in a private discussion that if removing the 40 per cent guarantee on losses as part of the revisions in favor of the miners, it will not work.

He was also told by the banks that lending money to miners will be riskier for them if the guarantee is removed.

"It relies on a critical asumption - that the so-called guarantee of 40 per cent of losses in bankruptcy actually has a value to financiers,” he said.

"If it doesn't, then in Ken Henry's own words the logic of the entire tax collapses and this is just a 40 per cent take, which of course will then damage the industry.”

Mr. Forrest said he will provide details of his conversations with Dr. Henry after Mr. Rudd accused the mining industry for statements on the tax which were “balderdash” and “bunkum.”

"The Prime Minister has come out and instead of saying, 'I got this wrong, I rushed this through in secrecy, I made a mistake'... he's now going to turn around and blame the mining industry," he argued.

On the other hand, Resources Minister Martin Ferguson addressed participants in a national conference in Canberra that the Government is willing to negotiate, however, the 40 per cent tax still remains.