Prime Minister Anthony Albanese has denied any rift with a senior Cabinet minister, despite reports he intervened to kibosh a deal she had struck with the Greens.

The Greens and independent senator David Pocock had been in discussions with Environment Minister Tanya Plibersek over the the federal government’s stalled election promise to establish a national environment watchdog.

After weeks of negotiations, where the Greens dropped demands for a climate trigger in favour of action against forest logging, the parties were poised for a breakthrough.

Then, Albanese picked up the phone. A few hours later, he told the Greens to destroy the deal without informing Plibersek’s office, according to sources close to the negotiations.

The agreement – apparently all but stamped last Tuesday morning – was in tatters later that day, amid reports of an appeal by Western Australian Premier Roger Cook.

WA mining bodies such as the Chamber of Minerals and Energy WA, as well as Tasmanian forestry organisations such as Tasmanian Forest Products Association, had criticised the proposed changes.

As Labor prepares for a federal election, it has its eyes on seats in the resource rich states of WA and Tasmania.

Cook said he had “conversations at the highest level” assuring him the legislation would be shelved.

“I simply made sure that Western Australia’s view was put forward and put forward effectively,” he said last Wednesday.

“I’m very pleased to have received assurances from the highest levels of government that those laws will not be going ahead in their current form this week.

“It was going to disadvantage Western Australian industry, it was going to be a risk to Western Australian jobs, and so that was obviously a point of concern for us.”

The proposed watchdog, named Environment Protection Australia, was to target offences to do with hazardous waste, sea dumping, air quality and wildlife trafficking. It would also be able to impose fines of up to $780 million for serious intentional breaches, issue stop-work orders and audit businesses to ensure they comply with environmental laws.

On Monday, Greens senator Sarah Hanson-Young, who was part of the negotiations, said a deal was “definitely close”.

She said it was “very clear … that the Prime Minister did not want these laws being debated”.

“What I was told was that there were problems with the set of amendments, or the areas that I have been negotiating [on] with Tanya Plibersek, and that it was too hard to do [last] week,” she told Radio National on Monday.

“I walk out of the room, of course. And before we know, at the front page of The Australian, The West Australian, virtually every newspaper the next morning was saying that the business lobby, the miners and the loggers had convinced the Prime Minister to dump these laws.”

Albanese and Plibersek’s offices declined to comment last week. But he did address the issue on Monday morning, denying there was ever a deal on the so-called Nature Positive reforms.

He said it was “extraordinary that the media want to concentrate on what didn’t happen as opposed to what did happen”.

Albanese said the decision to dump the proposal was not political.

“This isn’t about politics, it’s about getting it right – and we won’t support measures that don’t get it right,” he told ABC NewsRadio on Monday.

“We want to support industry to be able to operate effectively but also to operate in a sustainable way.”

Asked about speculation of a feud between himself and Plibersek, Albanese said that “absolutely” wasn’t the case.

On Sunday, he rejected suggestions the Greens deal was agreed to before it was spiked.

“There’s no draft agreement to me,” Albanese told ABC’s Insiders, to which interviewer David Speers said: “Are you saying that letter doesn’t exist?”

“Well, no letter to me exists.”

-with AAP