Scott Morrison has rejected calls to preference One Nation last at the next election, saying he'll wait until nominations close to make a decision.
However, a number of his Liberal MP colleagues say it makes sense to put the minor party last.
Labor has challenged the coalition to put Pauline Hanson's party last after criticising her views on Muslim migration and her Queensland Senate ticket allowing Fraser Anning to enter parliament.
The prime minister said he wouldn't do any deals with One Nation, but accused Labor of having an agreement with the minor party at the last election.
"We will wait until nominations close and as is always the case we'll set our preferences and the full range of tickets," he told ABC News Breakfast on Wednesday.
Senator Hanson says several Liberal members have told her they disagree with Mr Morrison.
"They're very disgusted with the prime minister's comment and so let's just see what happens when it gets closer to election time," she told ABC Radio National.
The Queenslander says Mr Morrison has "fallen into the trap of the Labor Party", considering she has worked well with the coalition to pass their legislation.
"They've said I've been very good to work with, I'm not an extremist," she said.
Senator Anning, who replaced disqualified One Nation senator Malcolm Roberts before quitting the party after a falling out with Senator Hanson, has been widely condemned for blaming the Christchurch terror attack on Muslim immigration.
Mr Morrison said he would stick to the Liberals' policy of not doing preference deals.
"We don't know who some of the nominees are. What if Fraser Anning runs candidates around the country? We're not going to prejudice that," he said.
The decision around how to suggest voters order their preferences is usually left to each state branch of the party, however in the past federal leaders including John Howard have ordered them to put One Nation last.
Victorian Liberal MP Tim Wilson wrote on Twitter he had a longstanding view that "we should put One Nation and their despicable acolytes last".
Liberal frontbencher Simon Birmingham told ABC radio there would be no deals with One Nation.
"I trust that we will be putting those of extremist positions at the bottom of the ticket and it's just a case of seeing which order you put the extremists in," he said.
Labor frontbencher Penny Wong said the prime minister should show leadership.
"Right-wing extremists who promote fear to stoke the flames of hate for their own political gain should have no place in our parliament," she said.
Australian Associated Press