Mr Whiteley told Federal Parliament yesterday that Save the Tarkine, which campaigns against mining in the North-West, was seeking $40,000 and an apology for his recent comments about the group.

"It has become quite clear just how they intend to start their next fund-raising campaign, by suing me!" a fiery Mr Whiteley said.

Save the Tarkine spokesman Scott Jordan declined to comment or confirm that law firm Bleyer Lawyers had sent Mr Whiteley a letter on the group's behalf.

Mr Whiteley said: "How dare this organisation engage an inner- city Melbourne legal firm to try to stifle the political process with attempts to bully MPs and Senators into silence.

"I will not be silenced by Save the Tarkine or their fancy lawyers because I know that the overwhelming majority of my electorate desperately wants to see new jobs in our region and a future for our young people."

Mr Whiteley used parliamentary privilege, which protects MPs from defamation action, to attack the group.

"They are like schoolyard bullies."

According to Save the Tarkine's annual report, it received $500 in membership fees. Mr Whiteley estimated the number of members at 25 based on an average of a $20 fee.

In State Parliament, Resources Minister Paul Harriss also attacked the environmental group, which has won several court battles against Venture Minerals, delaying the company's iron ore mine. The group's website lists a 36 per cent fall in the mining company's share price as an achievement.

"It is an appalling display of arrogance and contempt for Tasmanians, and North-West Tasmanians in particular, that this green group openly boasts of the damage its actions are inflicting on a company that wants to invest in our state," Mr Harriss said.