Govt rethink as Lambie quits Palmer The Abbott government faces a budget savings and policy rethink after Jacqui Lambie quit the Palmer United Party to sit as an independent. The resignation ended a bitter two-week battle between Senator Lambie and PUP leader Clive Palmer, in which he called her a "drama queen" and she accused him of blocking her attempts to help Tasmania and seek a better pay deal for Defence personnel. Her departure from PUP has jeopardised many of the policies of the government which needs six of eight crossbench votes to pass legislation. It has largely relied on the PUP voting bloc of senators Lambie, Glenn Lazarus, Dio Wang and Motoring Enthusiast Party's Ricky Muir, as well as conservative-leaning crossbenchers David Leyonhjelm and Bob Day. But Senator Lambie won't support any government bills until Defence personnel are offered a better pay deal, and with Senator Muir voting his own way a number of times, the bloc is effectively reduced to two and horse-trading will become even more complex. The Senate is standing in the way of $30 billion in budget measures, university fee deregulation, changing the renewable energy target and the re-starting of temporary protection visas. Government Senate leader Eric Abetz said it was "business as usual" and the government would deal professionally with crossbench senators. However, the government would not reconsider its decision on Defence pay because the ADF remuneration tribunal had made a determination. "Let's keep in mind, this is in the context where we are borrowing $1000 million a month just to pay the interest on existing borrowings," Senator Abetz said. Senator Lambie is demanding an extra $121 million to raise the Defence pay offer, as well as returning Christmas leave and travel entitlements. "If Mr Abbott admits his mistake and apologises ... then I feel sure the Australian people will forgive him and he will be viewed as a better leader," she said of the Defence pay deal. Mr Palmer said Senator Lambie was being manipulated by two lobbyists - Tasmanian poppy growers spokesman Glynn Williams and former Queensland state MP Rob Messenger. "Being in parliament should be about public service, not serving ourselves," he told Fairfax Radio. The PUP leader hasn't decided whether he will take legal action against Senator Lambie to recoup "hundreds of thousands" of dollars spent on her 2013 election campaign. Liberal frontbencher Josh Frydenberg earlier said it was a "statement of the obvious" that a split in PUP would make life more difficult for the government. Independent senator John Madigan, who quit the Democratic Labour Party in September over internal problems, said it was important the Senate be a "house of review, not a rubber stamp."