Independent senator Jacqui Lambie has called for Liberal senator Eric Abetz to quit parliament, amid backlash over his racial slur.

On Thursday, Mr Abetz was speaking to 2UE’s Justin Smith when he dropped the outdated and offensive slang word, “negro”.

“Eric’s gone from being top of the game to the back, back, backbench,” Senator Lambie told Fairfax Media on Friday.

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Ms Lambie called for Mr Abetz to “get out now” while he still retains “whatever integrity he’s got left”.

“If I were Malcolm Turnbull I’d be keeping a very close eye on him because he’s becoming erratic.”

The Senator uttered the word when rejecting a suggestion by Mr Smith that refusing to bake a cake for a same-sex wedding was on par to discriminating against Asian people.

“Those sort of analogies are quite offensive and that sort of analogy was completely debunked by Justice Clarence Thomas, the negro American on the Supreme Court of the United States dealing with this issue … who dissented on the issue of marriage as well,” Mr Abetz said on air.

It came on the same day as he accused Liberal National’s MP Warren Entsch of an “ambush”, regarding his plan to get a same-sex vote into parliament before the 2016 election.

Mr Abetz and Mr Smith had been speaking about the right of pastry chefs to refuse to make wedding cakes for same-sex couples who intended to marry.

Mr Abetz said business people had the right to decide for themselves, and if a baker refused to produce a cake for a Liberal Party function, “I don’t think I should be able to sue them or put them out of business”.

The conservative senator was dumped from the employment Cabinet portfolio by Malcolm Turnbull in his re-shuffle soon after becoming Prime Minister.

The comment came a day after he complained about the media always defining him as part of a conservative wight wing faction of the Liberal Party.

After the racially insensitive comment, Mr Abetz’s conservative colleague, Senator Cory Bernardi, leapt to his friend’s defence.

“I am sure I am not alone in seeing the irony of Jaqui Lambie lecturing others in dignity and erratic behaviour,” he said.

– with reporting by Kaitlin Thals