Damaging new rifts have appeared in coalition ranks less than 24 hours after Cabinet approved the full sale of Telstra, with Liberal back bencher Alby Schultz now refusing to support the full float of the telco.

The member for the lower house seat of Hume in NSW, Schultz is sticking to his long-held philosophical position that Telstra should not be sold, telling Computerworld that services that did not satisfy the profit criteria of the markets were liable to be "discarded" to serve the needs of shareholders.

Schultz said he does not intend to vote for the Telstra sale bill when it enters the lower house; however, he will abstain rather than side with the opposition.

He added it would be futile to cross the floor and vote with the opposition against the legislation "because a Labor government would only sell it if elected anyway".

Despite his strong philosophical beliefs the government should retain Telstra, Schultz said he supported the $3.1 billion package to improve regional telecommunications.

"I'm happy with the package - anyone that would not be happy with the package would have to be out of their mind," Schultz said.

While Schultz's position is a clear indication of grass roots dissent in the both the Liberal and National parties over the full privatization of Telstra, his stand has little direct impact on whether the vote will pass the lower house with the government holding a massive majority of 26 seats over the opposition.

A bigger worry is Liberal NSW Senator Marise Payne whom is rumoured to be contemplating a change of heart should she fail to secure a place on the Liberal's senate ticket for the next election.

While Payne's office said she is backing the full sale of Telstra, it hastened to add "she's not stupid". Liberal party sources also conceded questions had been raised internally over how far support from Senator Payne's might extend.

In the face of yet more internal acrimony, Communications Minister Senator Helen Coonan is sticking to her guns having appeased elements of the Queensland branch of the National Party with a $3.1 billion handout at Telstra's expense.

Coonan said the legislation enabling the full sale of Telstra would come at the "earliest opportunity" though no date had yet been allocated for the final float.

"Passage of this legislation is critical to securing immediate, ongoing funding for regional telecommunications and to lock in future funding arrangements to operate following any actual sale of Telstra," Coonan said.