A central Queensland coal mine has emerged as a crucial campaign issue in a working class Melbourne seat, as Labor tries to fend off a spirited attack from the Australian Greens.

The controversial Adani mine quickly took centre stage as prominent union boss Ged Kearney was formally announced as Labor's star candidate for the upcoming Batman by-election.

The ACTU president has a tough fight on her hands against the Greens, who are confident of snatching the once-safe Labor seat following Thursday's resignation of MP David Feeney who became the opposition's first casualty of the citizenship saga.

Greens leader Richard Di Natale thinks his party is in with a real chance to pick up the marginal seat in Melbourne's inner north, which would give it two spots in the House of Representatives.

The Greens and activist groups are seeking to pitch the by-election as a referendum on issues including climate change, the Carmichael mine, power prices, inequality and immigration.

Ms Kearney, who was surrounded by activists waving "Stop Adani" placards, thinks the Adani mine will fall over.

"Personally, I really can't see Adani going ahead," she told reporters.

"I know that Adani are not good employers. They don't treat their employees very well. They don't care about the impact on communities around the world where they work."

The Queensland Labor government supports the mine to boost regional jobs, but insists it won't be providing any taxpayers' money to back the project.

However, federal Labor leader Bill Shorten significantly ratcheted up his rhetoric against the mine, outlining a range of economic and environmental issues clouding the development.

Mr Shorten said he and the party were growing "increasingly sceptical" of the Adani mine after the company was accused of falsifying scientific samples and evidence.

"Adani does not deserve a licence to operate a coal mine if they are relying upon false statements and false facts," he told reporters.

Ms Kearney said federal Labor would soon land on a position about whether to support or oppose the mine.

"I think people can get a fairly good understanding of maybe where that position will be," she said.

Mr Feeney resigned from parliament on Thursday after failing to find evidence he had renounced his British citizenship, making him ineligible to sit in the lower house.

Greens candidate for Batman Alex Bhathal has run in each election for the seat since 2001, barring 2007.

She won the primary vote at the last federal election but Mr Feeney clung on courtesy of Liberal preferences, taking Batman with a margin of one per cent.

The Liberals are yet to say if the party intends to run a candidate.

ACTU secretary Sally McManus said Ms Kearney would be a fierce voice in federal parliament.

"I thank Ged for her service to the Australian union movement and wish her every success for Batman," Ms McManus said.

Senator Di Natale said while Ms Kearney was a good person, she would advocate "bad policies".