The Nationals and Tony Abbott have warned of dangers ahead for the Liberal party by preferencing One Nation.
The warning comes as Treasurer Scott Morrison seeks to woo the Senate crossbench, which includes four senators from Pauline Hanson's party, on welfare changes - linking the savings to spending on disability services.
The coalition has been heavily relying on One Nation to get its program through the parliament, with Senator Hanson's team backing government bills on two-thirds of occasions.
While Labor has been ramping up pressure on the Liberals not to deal with One Nation or offer preferences to the minor party, Prime Minister Malcolm Turnbull has been talking up the relationship.
"It is a substantial crossbench party in the Senate and it is taking a policy position on a wide range of issues," Mr Turnbull told reporters on Monday.
"It is not a single issue party or a single personality party. We deal with it constructively and respectfully because we respect the fact that each of those One Nation senators has been democratically elected."
It was a far cry from May last year, when on the election campaign trail Mr Turnbull said Pauline Hanson was "not a welcome presence on the Australian political scene".
A debate has arisen within the coalition over the merits of preferencing One Nation at the upcoming West Australian and Queensland state elections and a future federal election.
The Queensland Liberal-National Party is considering a deal with One Nation after a poll showing the minor party could win up to 23 per cent of the primary vote.
Federal Nationals leader Barnaby Joyce questioned the move.
"It's a statement of fact that the most successful governments in Australia are Liberal-National governments and ... when you step away from that, there's one thing you can absolutely be assured of, you're going to be in opposition," Mr Joyce said.
Former prime minister Tony Abbott said he would never support preferencing One Nation above the Nationals.
"I'd certainly be putting One Nation ahead of Labor and I'd be putting the National Party ahead of everyone," he told 2GB radio.
Senator Hanson told parliament Queensland ALP secretary Evan Moorhead had approach her party on January 25 to "run dead" in Labor seats in exchange for Labor running dead in One Nation strongholds.
Mr Moorhead denied this, saying he had told Senator Hanson's chief of staff James Ashby the ALP would not do a preference deal as the long-standing position was to put One Nation last.
Talks with One Nation and other crossbench parties are set to intensify in coming days as the government seeks to pass its welfare "omnibus" bill.
Mr Morrison was going to bank about $3 billion in savings from six welfare measures in order to balance the federal budget.
The remainder of the money was to be spent on a new childcare subsidy program.
But Mr Morrison announced the money which was to be banked will now go into the national disability insurance scheme's "locked box" special fund.
"The NDIS's account will be poorer for it if the bill is not passed," Mr Morrison said.
Labor frontbencher Jenny Macklin said linking cuts to families, new mothers, pensioners and carers to spending on the NDIS was a "disgraceful political game of brinkmanship".