Jeff Kennett, chairman of the beyondblue depression initiative, has blasted Clive Palmer for saying Tony Abbott should "commit suicide" because of his government's plan to deregulate university fees.

Mr Palmer's widely criticised comments came as Education Minister Christopher Pyne publicly backed a compromise proposed to reduce federal subsidies for universities that increase their fees above current levels.

The Palmer United Party on Wednesday rejected the proposal, originally outlined by HECS architect Bruce Chapman as a way to keep prices low in a deregulated system.

"The answer for Christopher Pyne is no, no and no again,"  Mr Palmer said.

"There's a million students going to tertiary education in this country. There's a million more that's about to go, and a million more that's just left.

"So commit suicide Tony Abbott, you know."

Mr Palmer later said he had meant to refer to "political suicide" and that he apologised "for any offence caused".

Mr Kennett, the former Victorian premier, said Mr Palmer's apology was just "playing with words".

"We are losing seven people a day to suicide," Mr Kennett said. "Clive Palmer's comments were thoughtless and show him to be out of touch."

Talking about "political suicide" was also offensive, Mr Kennett said.

Assistant Minister for Social Services Mitch Fifield said: "It's a good thing that Mr Palmer has apologised and I think all members of Parliament need to take this opportunity just to pause for a moment and think of the language that they use in political discourse."

In a blow to the government, PUP senator Zhenya "Dio" Wang said he no longer supports allowing universities to charge their own fees. The Prime Minister said on Wednesday he hoped Senator Wang would convince his colleagues to support deregulation.

Without the support of PUP, the government would need to convince all six other Senate cross-benchers to support its changes.

"Plainly Senator Dio Wang is very keen on our proposals and hopefully as the Palmer Party discusses this more and more Senator Wang will be more and more influential," Mr Abbott said.

But Senator Wang said his past statements supporting deregulation were "only in the process of thinking through the policy".

"I toe the party line and fully support our party's stance on higher education. I am only one third in the party room."

Mr Pyne said Professor Chapman's "reasonable" levy proposal had wrecked the Labor "scare campaign" that fees would soar under a deregulated system.

Labor higher education spokesman Kim Carr said discussions between the government and Senate crossbenchers on the proposal was an "act of desperation".

Fairfax Media understands Motoring Enthusiast Party Senator Ricky Muir is considering Professor Chapman's proposal but has yet to be convinced by the case for fee deregulation. A spokesman for independent Senator John Madigan said he was still considering his position. Senator Nick Xenophon has called for a comprehensive review of higher education funding while Jacqui Lambie has strongly opposed any increase in student fees.

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