Clive Palmer "offered to withdraw" his legal challenge against Western Australia's border closures if officials agreed to move arbitration hearings relating to his near-$30 billion damages claim against the state government.
WA Attorney-General John Quigley has tabled in state parliament a letter written by the in-house counsel for Mr Palmer's Mineralogy company.
The letter sent to the WA state solicitor's office last week said Mineralogy "could be agreeable" to withdraw the High Court challenge if the government agreed to move the unrelated arbitration hearings from Perth to Canberra.
This would have allowed Mr Palmer and his QC to attend the hearings in person.
Premier Mark McGowan says the letter proves Mr Palmer was pursuing the court action for his own benefit, labelling it a "disgusting scam".
"He just wanted to bring the border down and risk the lives of West Australians so he could get money out of us," he told parliament on Wednesday.
The WA opposition has meanwhile confirmed it will support the state government's extraordinary bid to block Mr Palmer's damages claim.
Mineralogy is pursuing WA over a 2012 decision by the former Liberal government to refuse to formally assess its proposed Balmoral South iron ore mine in the Pilbara.
The McGowan government has said Mr Palmer and his associated companies Mineralogy and International Minerals are claiming a total of $27.7 billion minus costs.
Labelling the move "obscene", Mr McGowan is pushing for other MPs to back unprecedented legislation which would terminate the arbitration between the two parties.
"He is trying to take our money and if he's successful that would mean mass closures of hospitals, of schools, of police stations, mass sackings ... it is an extreme risk to Western Australia," he said.
"I will not risk selling Western Australia down the drain to Clive Palmer."
Mr Palmer claimed he and the WA government had previously agreed to mediate the dispute, adding the proposed legislation would damage the state's reputation.
"The attorney-general really says that he thinks 'we're guilty and we're going to have to pay up'," he told Perth radio 6PR.
"I think it would be very bad to do. Western Australia's been a very successful state based on the sanctity of its state agreement and its sovereign risk.
"If it passes this act, all that's out the window. Its credit rating's liable to go down and people that have invested in this state will be worried about what's going to happen."
Mr Palmer said the damages were yet to be assessed, labelling talk of a $30 billion claim "bulls***".
But the attorney-general has dared Mr Palmer to waive his confidentiality under the Commercial Arbitration Act to "put it all out on the table".
Mr McGowan said he had spoken to mining industry stakeholders and assured them his emergency legislation did not create sovereign risk or threaten other state agreements.
"We have around 70 state agreement acts in Western Australia. They have been around now for 70 or 80 years," he said.
"This has never happened before. Ministerial decisions have always been accepted and worked through between the state government and proponent."
The government hopes to have the bill passed by Thursday.
"My conscience is clear. I know we are doing the right thing by the state," Mr McGowan said.
"I wasn't elected to cave into these sorts of personal interests."
Australian Associated Press