Queensland’s re-elected Labor Party Premier Annastacia Palaszczuk has written to Prime Minister Malcolm Turnbull to veto a federal loan to Indian conglomerate Adani Enterprises’ A$16.5-billion Carmichael coal project in Galilee Basin, a media report said.

In one of her first acts after she was officially sworn in on Tuesday morning, Palaszczuk has followed through on the shock announcement she made during the election campaign to block a A$900 million loan from the Northern Australia Infrastructure Facility to the Indian conglomerate to build a common-user rail line in the basin, The Australian reported.

“My government provides formal notification for the Commonwealth that financial assistance should not be provided to Adani for the North Galilee Basin Rail Project,” Palaszczuk’s letter to Prime Minister Turnbull reads.

“As such, the government is exercising its veto right under section 13(4) of the Investment Facility Mandate in response to the Adani loan application.”

An Adani spokesman said the company was still committed to Queensland despite the veto, and insisted the Queensland government was still supportive of its Carmichael coal mine proposal for the Galilee Basin.

“We congratulate Premier Palaszczuk on her government’s election and look forward to working closely and cooperatively with the state and federal governments and regulatory authorities as we get on with the job of making all of our projects a reality,” the spokesman said.

“Adani Australia currently employs over 800 people and has invested over $3.3 billion in Queensland, which is one of the biggest investments by an Indian company in Australia.

“We would not be investing our time, money and energy in this manner if our projects were not viable and if we were not serious about delivering our projects which will ultimately generate more than 10,000 direct & indirect jobs across all of our projects.

“The projects are viewed in a positive light by the Queensland Government and considered as critical infrastructure investments. The projects continue to retain the support of the Queensland Government.

“Adani Australia will now fully consider and adjust to the constraints the veto of NAIF (Northern Australia Infrastructure Facility) funding brings. Adani Australia is 100 per cent committed to Queensland, we have a strong regional Queensland presence. This will not change,” it said.

The contentious loan was for a rail line connecting the Carmichael coal mine to the Abbot Point coal terminal, and related mining project.

In response to Palaszczuk’s letter to Turnbull, Northern Australia Minister Matt Canavan said the Queensland government had “chosen to stand in the way of North Queensland jobs as its first official act”.

“It was the Palaszczuk Government that first asked last year that the NAIF consider a loan to the Adani Galilee rail project in a letter from the now-sidelined former Treasurer Curtis Pitt,” Senator Canavan said.

“But what the Queensland Premier has failed to say today is whether she intends to block all investment in the Galilee Basin.

“The people of regional Queensland deserve to know which jobs will be next on Labor’s hit list.

“I hope the Adani project proceeds because there are 800 people whose current jobs depend on it, and thousands of future jobs hang in the balance. If Adani does proceed it will be in spite of Queensland Labor not because of it.”

Under the constitution, the federal government funding must be facilitated by the state government to the private company.

Palaszczuk said newly appointed Treasurer Jackie Trad, the state’s Deputy Premier, would write to federal Northern Australia Minister Matt Canavan to provide the same advice.

During the campaign, the Integrity Commissioner wrote to Palaszczuk and said she should not make any decisions about any NAIF applications, because of a conflict of interest created by Palaszczuk’s partner working on Adani’s NAIF application, the Australian reported.

However, she said she would veto the loan. Palaszczuk has not said what she would do for other NAIF projects, such as Aurizon’s application to build a rail line in the Galilee Basin.

Despite scepticism that its Carmichael mine was not viable, Adani said it had been verified by independent third parties to be in the lowest cost quartile of the cost of production in the global cost curve for seaborne thermal coal.

The decision to veto the loan has been criticised by the federal coalition government, which says it will put the entire multibillion-dollar project in jeopardy.