Environment groups will be forbidden from challenging large developments in court as the Abbott government responds to the controversial decision that stopped Australia's largest coal project – Adani's Carmichael coal mine - in its tracks.

Attorney-General George Brandis will move to repeal a section of Australia's environment laws that allows conservationists to challenge environment approvals for mining projects and other large developments.

It comes after Prime Minister Tony Abbott labelled as "sabotage" a successful challenge by a Queensland conservation group in the Federal Court that halted Adani's Carmichael coal mine in central Queensland.

Mackay Conservation Group, Adani and Environment Minister Greg Hunt agreed the company's federal environment approval should be set aside after the challenge successfully exposed the government's failure to properly consider two threatened species – the yakka skink and ornamental snake.

Mr Abbott declared in the aftermath it would be "tragic for the wider world" if projects like Adani's could not proceed because they could be "endlessly frustrated" by environmentalists.

The Coalition endorsed a plan on Tuesday to repeal a section of Australia's Environment Protection and Biodiversity Conservation Act that allows green groups to mount legal challenges to environmental approvals.

Senator Brandis will put the amendments to Parliament this week.

The crackdown has been described by the Greens, environment and community groups as an "attack on democracy" that will limit the rights of communities to ensure the country's environment laws are being upheld.

On Sunday, Senator Brandis said the act as it currently stood had encouraged cases of "vigilante litigation" and he was "appalled" by the Adani decision.

Under the current laws, anyone "adversely affected" by a decision or a failure to make a decision has the legal right to challenge it.

This includes any Australian citizens and residents who have acted "for protection or conservation of or research into the environment" any time in the two years before the decision was made.

The changes proposed will mean that legal challenges can only be made by people directly affected by a development, such as a land holder.

Senator Brandis said on Tuesday Australia's environment laws provided a "red carpet" for activists that had a political, but not a legal, interest in projects.

"The government has decided to protect Australian jobs by removing from the Environment Protection and Biodiversity Conservation Act 1999 (EPBC Act) the provision that allows radical green activists to engage in vigilante litigation to stop important economic projects," he said.

"The activists themselves have declared that that is their objective –  to use the courts not for the proper purpose of resolving a dispute between citizens, but for a collateral political purpose of bringing developments to a standstill, and sacrificing the jobs of tens of thousands of Australians in the process."

The move was welcomed by Minerals Council boss Brendan Pearson who warned that future investment in the industry would be a risk if projects continue to be subject to delays caused by the "gaming" of the environmental approval processes by "a handful of protest groups".

"The mineral sector supports reforms designed to prevent vexatious legal actions designed to delay and derail new mining projects and the expansion of existing projects," he said.

"New projects and expansions must be treated on their merits, not held up by vexatious and incessant legal appeals lodged by a small band of extreme environmental groups."

Last week, the Queensland Resources Council launched an online petition, which now has 1500 signatures, calling for action on "activists exploiting legal loopholes".

However Greens environment spokeswoman Larissa Waters said gutting public enforcement of environment laws was an attack on democracy.

"Senator Brandis has become the first ever Attorney-General who wants less enforcement of the law. Our national environment law protects our most important natural icons and wildlife," she said.

Environment groups said the government was trying to strip communities of their right to defend nature and the few legal avenues they had.

"Landholders and communities are just not going to cop this," Lock the Gate's spokesman Phil Laird said.

Nicky Chirlian, a member of the Upper Mooki Landcare Group challenging the NSW approval of the Shenhua Watermark coal mine, said: "If these changes go ahead, it will undermine basic justice and fairness for rural communities who are facing off against the biggest mining companies in the world."

The Australian Conservation Society said it was "nothing short of an attempt to strip communities of their right to a healthy environment".

"Prime Minister Abbott and Attorney-General Brandis seem determined to strip Australians of the right to legitimate legal action to protect nature in this country," chief executive Kelly O'Shanassy said.

"We want to make sure approvals for projects, such as Adani's proposed Carmichael coal mine, are above board and consistent with people's right to a safe environment."

Adani's Carmichael project has attracted global attention because of the proximity of coal terminals at Abbot Point to the Great Barrier Reef.

The terminals would be connected by rail to the mine in central Queensland, which would produce up to 60 million tonnes of coal each year.

The Liberal and Labor parties have praised the project, with the federal government hailing it as a "miracle" energy solution for India's poor that would also bring much-needed jobs to Queensland.

But the project has faced serious questions about its financial viability and has hit trouble in recent months.

Brendan Sydes, the chief executive officer of Environmental Justice Australia, said that environmentalists have had a legal right to challenge such projects since the Howard government introduced it into the act in 1999.

"I think the power of the mining industry and the fact it has this government in some sort of a headlock means we're seeing action here that governments of all persuasions have not been prepared to counter in the past…this government's prepared to try," he said.

Mr Sydes said the change meant that enforcing the law's environmental protections was "at the mercy and whim of the government of the day".

"We all have a direct interest in making sure things like the Great Barrier Reef are protected so to suggest the likes of thousands (of conservationists) don't have an interest in environmental outcomes is just nonsense," he said.

A series of Fairfax Media stories this year raised questions about the ultimate ownership of Adani's assets in Australia, as well as the transparency of its corporate structure.

Confidential Queensland Treasury documents revealed in June that Treasury officials had also expressed serious concerns to the Queensland government about Adani's transparency and ability to finance the project.

In recent weeks, the company has begun sacking its Brisbane staff and contractors and its relationship with its chief financial adviser Commonwealth Bank has ended.

Groups including Greenpeace, GetUp! and 350.org have targeted their campaigning, in part, at banks that might finance the mine.

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