Firebrand Liberal senator Jacinta Nampijinpa Price has warned she could be bankrupted and removed from parliament if she loses a defamation case brought against her by the head of the Northern Territory’s Central Land Council.

“I was really hoping it wouldn’t come to this,” Price, who controversially defected from the Nationals to run for the Liberal deputy leadership in May, wrote in a message to a mailing list this week ahead of a trial in October.

Northern Territory Liberal senator Jacinta Nampijinpa Price is being sued in the Federal Court.

“If it goes well for them – defamation cases can go either way, after all – they might even bankrupt me and cost me my seat in parliament. But I will not go down without a fight. I will never back down on my principles.”

Under section 44 of the Australian Constitution, members who are undischarged bankrupts or insolvent are ineligible to sit in parliament.

A stumble in Price’s political career would deal a blow to the federal Coalition’s right-wing star power. The Northern Territory senator’s profile skyrocketed after she played a key role in defeating the 2023 Voice referendum and was elevated to opposition Indigenous affairs minister.

Senator Jacinta Nampijinpa Price has been mooted as a future Coalition leader and has the backing of former prime minister Tony Abbott.

Price, whose divisive views on Indigenous issues have troubled other Indigenous leaders, has used her time in parliament to fight for free speech and resist “political correctness”. She has also called for a wide-ranging inquiry into land councils, which negotiate with governments and corporations on behalf of Aboriginal landholders.

She is being sued in the Federal Court over a press release she sent last July about the Central Land Council in which she claimed that a vote of no confidence had been moved against its chief executive, Les Turner.

“Through last week’s vote, a majority of Central Land Council members showed their support for the dismissal of the CEO due to unprofessional conduct,” the release said. It claimed the no confidence motion was unsuccessful but had been backed by the then-chair of the land council, Matthew Palmer.

Turner’s defamation suit, launched last September, alleges he has been “seriously injured in his character and in his personal and professional reputation” by suggestions that he was unfit to serve as chief executive and had lost the support of his members.

The claim describes Price’s conduct as “improper, unjustified or lacking in bona fides” and says she failed to check the accuracy of her claims before issuing the press release.

“The respondent has not retracted, or apologised, despite being told unequivocally on 22 July 2024 by the [Central Land Council] that her claims were false,” Turner’s claim states.

Price has dropped her truth and honest opinion defences and will be solely relying on the defence of qualified privilege.

Her court filing says she was acting on information provided to her by the land council’s then-chair, raising “issues of significant and immediate public interest that required her comment as shadow minister for Indigenous Australians and Senator for Northern Territory.”

Her statement of defence further alleges deficiencies in the Central Land Council’s approach to fraud risk.

The parties were ordered to take part in mediation, but a defamation trial is now set down for October in Darwin.

“Please think of me, but know that I’ll be walking into that courtroom proudly with my head held high,” Price wrote. “Why? Because I’m doing it for you.”

Turner, through his lawyers, declined to comment. A spokeswoman for Price said the senator could be forced to pay damages and legal costs if unsuccessful.

“The costs associated with defending a defamation proceeding like this are unknown but can be significant,” the spokeswoman said. “Bankruptcy is a possible consequence.”

Price says she was raising matters of public interest. The Land Council’s chief executive Les Turner says she did not check her facts.

Price has been mooted as a future leader, and former prime minister Tony Abbott backed her failed bid to become the deputy Liberal leader after the election in May. But her influence has diminished under Sussan Ley, who relegated her to the outer opposition ministry as spokesperson for defence industry when she won the leadership.

The senator was one of the Coalition’s most powerful fundraisers in the lead-up to the May election, commanding up to $10,000 a head for a private dinner. But a gaffe weeks out from the poll, in which she pledged to “make Australia great again”, was seen as damaging to the Coalition’s campaign.

Price’s warning about the defamation suit follows the successful action brought by Victorian MP Moira Deeming against John Pesutto, a former Liberal opposition leader.

Pesutto was forced to enter into a loan agreement with his party to cover part of the $2.3 million in costs he owed Deeming.

Cut through the noise of federal politics with news, views and expert analysis. Subscribers can sign up to our weekly Inside Politics newsletter.