Mining magnate Clive Palmer is reportedly planning to set up his own political party, with the aim of potentially forming a coalition with Federal MP Bob Katter's party.

The Courier-Mail newspaper reported Mr Palmer plans to set up the United Party and is in open talks with Katter's Australian Party.

It comes a week after the billionaire sensationally quit his membership of the Liberal National Party after being reinstated following a suspension.

Mr Palmer continues to publicly criticise the LNP's parliamentary wing, accusing it of governing without regard to party policy.