The Rudd government blinked first in the divisive resources tax and said on Monday that the administration is ready compromise some areas of the planned 40 percent tax on resources profits.

Australia's Resources and Energy Minister Martin Ferguson told reporters at a press conference in Brisbane that there is still room for negotiations about the finer details of the proposed tax measure. "This is a genuine consultation process, we are listening."

Australia's mining sector is up in arms over the proposed resources tax with mining giant BHP Billiton Ltd. threatening to review its investment programmes. Rio Tinto Group made the same threat. Their views were shared by Santos Ltd and Origin Energy Ltd. which announced earlier they would delay their investment plans on their liquefied petroleum natural gas projects in Queensland.

In his letter to the company's shareholders, BHP Chairman Jac Nasser said that any new tax measures should apply only to new investments and not to existing projects. He said BHP is planning to launch information sessions among Australian shareholders to get their consensus on the issue.

Stephen Robertson, Queensland minister for natural resources said at the conference: "This is not the best time to put a new tax on the table."

However Treasurer Wayne Swan refused to reveal the government's position whether there is a plan to lower the proposed 40 percent tax on "super profits."

Speaking in Perth, Swan said he is willing to listen to what critics of the tax measure have to say, but added the government has already clearly outlined that is was willing to discuss "generous transitional provisions for existing projects."

The new tax laws will be enforced for existing projects, not just new ones, Swan said.