The West Australian Nationals say the party could be persuaded to surrender the opposition leadership to the Liberal Party if conditions are met.
Nationals MP Merome Beard announced her defection to the Liberals, leaving both parties with an equal number of seats in the state parliament's lower house.
Opposition leader and Nationals MP Shane Love refused to say what his party wanted in return for the leadership but did confirm the negotiations.
"We've outlined that we had some conditions that we would attach to that ... but I'm not in a position to outline the substance of those negotiations," he told reporters on Wednesday.
"We have had some board agreements but there are other matters that obviously have not been addressed."
Nationals WA state president Julie Freeman said: "Everything is on the negotiating table".
"We are wholly focused on unseating the Labor government and returning to a Liberal-National government in 2025," she said.
Speaker Michelle Roberts has reportedly said her office would continue to recognise Mr Love as the alternative premier.
But Mr Love said that could change if the parties reached an agreement while acknowledging it could be uncomfortable working with the Liberal Party when parliament resumes next week.
Liberal leader Libby Mettam said her party would continue to work with the Nationals in the Coalition and she had contacted Mr Love to arrange talks.
"We will continue to work collaboratively going forward, I will not be distracted by the job title," she said.
"I have respect for Shane Love as the opposition leader and we will continue to have discussions in relation to that."
The LNP coalition was hammered at the 2021 state election, with Liberal MPs winning just two seats of 59 in the lower house and the Nationals four.
But the move by Ms Beard will mean the Liberals and National both hold three seats in WA parliament's lower house when it is finalised.
Premier Roger Cook said the Liberal Party faced a tough task if it wanted to take the opposition leadership.
"If the Liberals want to be the actual formal leader of the opposition, they have to make out a case to the speaker for that to be the case," he said.
"I'm not sure the reason why the speaker would make a decision about changing the leader of the opposition just because of equal numbers."
He said the LNP was "chaotic, dysfunctional and riddled with conflict".
Ms Beard confirmed she would apply to become a Liberal Party member and said her decision had been based on how she could best deliver the changes needed in her electorate.
Mr Love also announced the Nationals would launch its second metropolitan branch in Perth on Wednesday night.
"This is in response to the fact that we've had overwhelming numbers of people coming to us saying 'we like what you guys are doing, we think you're a sensible alternative'," he said.
