The decision casts marriage equality off into the never-never, with the Turnbull government adamant a plebiscite is the only way of achieving reform in this term of Parliament, and one Coalition MP already threatening to bring down the government if that is changed. 

Labor tussled with the issue for weeks but hardened its resolve after consulting with gay and lesbian advocacy groups and mental health experts, with Opposition Leader Bill Shorten at one point declaring a public vote on same-sex marriage could lead vulnerable people to suicide.

A source inside the Labor caucus indicated the discussion took less than 15 minutes and was resolved unanimously.

Mr Shorten on Tuesday said he had not heard a good argument for the plebiscite and reiterated Labor's view that it was unnecessary, expensive and had the potential to cause mental ill health among LGBTI people.

Conservatives in the government will celebrate the result, which comes 14 months after the plebiscite was first conceived at a marathon Coalition party room meeting under former prime minister Tony Abbott.

Disappointed by the Opposition’s decision, New England MP Barnaby Joyce urged those equally as disheartened to contact their Labor senators or federal members.

“They’ve rejected the capacity to deal with the issue and have it over and done with by February,” Mr Joyce said. “The best way to deal with it was by plebiscite, I get one vote, you get one vote and all your readers get one vote.

“What the Labor party has done is, they haven’t voted against it, they have voted against resolving the issue.

“We went to an election promising a plebiscite and that comes with the mandate of the Australian people.

“The Australian people had a choice (at the election) if they really wanted his (Bill Shorten's) position on it they would have voted for him and they didn’t.”

Even with Labor unified in opposition to the plebiscite, the vote in the Senate will still be close. On the expected numbers, it would be defeated 37 to 35, with senators Cory Bernardi and Lisa Singh overseas, Labor senator Stephen Conroy having resigned and Liberal senator Dean Smith abstaining.

Australian Marriage Equality co-chair Alex Greenwich said the vote would be "very tight" and called on Labor to ensure all its senators voted in accordance with the policy adopted at caucus.

"The political reality is the plebiscite is now dead," he said. He expressed optimism that a free vote could be achieved in this term of Parliament despite the vehement opposition of the Coalition's right wing, insisting the process of agitating for a free vote "can only begin once the plebiscite is finally dead".

It came a Nationals MP Andrew Broad threatened to bring down the government if it switched to a free vote on same-sex marriage, indicating his support for the government was "conditional" on it honouring all its election promises.

"The government that I am a part of and will remain a part of is conditonal on the fact that the only way that there will be a change to the Marriage Act in this Parliament is a plebiscite," he said. "My position as a member of the government is very clear on that."