A powerful industry alliance is preparing to launch a multi-million dollar campaign designed to derail Prime Minister Julia Gillard's plans to introduce a carbon tax, reports said Friday.

Calling itself the Australian Trade and Industry Alliance, the Sydney Morning Herald said the bloc included the Minerals Council of Australia, the Australian Food and Grocery Council, and the Australian Coal Association.

Other heavyweight groups said to be involved are the Plastics and Chemical Industries Association and transport group the Australian Logistics Council.

None would confirm their participation, although the Australian Chamber of Commerce and Industry admitted to AFP that talks were under way.

"The ACCI is aware that there have been discussions among a number of industry groups about running an ad campaign against the carbon tax," it said.

"But at this point in time, the ACCI has not made a decision on whether to support the campaign or not."

However, the ACCI added that business believed the tax "would have a negative impact on Australia and reduce our competitiveness, particularly for small and medium sized businesses".

The campaign would reportedly mimic the successful one run against Labor's mining super profits tax a year ago, which saw the government water down key elements due to industry pressure.

It would involve television, radio, print, the Internet and social media and begin within seven days of the government announcing the final details of its scheme, the report said.

The Herald said the alliance's strategy document lists its key objective as to "build public opposition to the carbon tax so that it is either substantially modified or fails to pass the parliament".

Heavily reliant on coal-fired power and mining exports, Australia is one of the world's worst per capita polluters.

Canberra plans to tax the nation's 1,000 biggest polluters for carbon emissions linked to global warming from mid-2012, with a fixed price giving way to a cap-and-trade scheme within five years.

Though the final dollar amount is yet to determined, Gillard's Labor party plans to charge polluters for every tonne of carbon emitted, returning most of the revenue to householders and businesses through tax cuts.

But it is widely opposed on the grounds it would damage the economy and drive up the cost of living, piling the pressure on Gillard whose standing in opinion polls has slumped to an all-time low.

Despite the polls, and hundreds of protesters gathering in Sydney Friday to vent their anger at the tax, the prime minister insisted it was the right thing to do.

"We are going to price carbon so our nation can have a clean energy future," she told reporters.

"So we can do the right thing by our environment and have the benefits of the jobs that come with a clean energy future."

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