SA-Best leader Nick Xenophon is threatening to sue Opposition Leader Steven Marshall for defamation.
Mr Xenophon is angry about comments Mr Marshall made that SA-Best had "done a deal" with Labor to target opposition-held seats to prevent a Liberal majority government after the March 17 South Australian election.
Mr Xenophon said the statements were "totally false" and "defamatory".
"Accordingly this morning I have issued a concerns notice to Mr Marshall, pursuant to the Defamation Act," Mr Xenophon said in a statement.
Mr Marshall said on Tuesday it was his "strongly held belief" a deal had been done by Labor and SA-Best for Mr Xenophon to target Liberal-held seats.
"The reality is all the evidence supports this," Mr Marshall said on Tuesday.
SA-Best has announced its intention to run in around 30 seats in the lower house in a bid to hold the balance of power.
Mr Xenophon said previously he had no intention of deliberately targeting the Liberals and expected to run in roughly the same number of Liberal and Labor-held seats.