Laws that would have forced social media companies to police misinformation and outright lies on their platforms have been formally abandoned by the federal government.

The misinformation bill was flatly rejected by the Coalition, Greens and several senators on the crossbench, leaving it no pathway to be passed.

Meanwhile, as the government attempts to clear the decks in its last sitting week of the year and possibly this term, government sources say restrictions on gambling advertising will not progress this week.

Opposition Leader Peter Dutton said that decision was a "cowardly and craven capitulation".

"[It] just shows this government can't get the big calls right," Mr Dutton said.

"This is a government that is lurching from one disaster to the next and limping to the next election."

Misinformation bill killed

Sunday morning, Communications Minister Michelle Rowland confirmed the misinformation bill was dead.

"Based on public statements and engagements with senators, it is clear that there is no pathway to legislate this proposal through the Senate," Ms Rowland said.

"The Coalition committed to legislating safeguards when in government, but chose to place partisanship above any attempt to navigate the public interest."

The dumped laws would have given the Australian Communications Media Authority powers to set rules to remove certain speech on platforms, such as content from foreign actors seeking to undermine Australian democracy, or that urged people against taking preventative health measures such as vaccines.

Ms Rowland argued the bill would have combated "seriously harmful content" on digital platforms, while maintaining freedom of speech protections.

Mr Dutton said the government had failed an attempt to censor free speech online.

"The withdrawal of this dangerous legislation is a win for free speech and for democracy," Mr Dutton said.

"No minister and no bureaucrat has a monopoly on truth. And yet, Labor's legislation sought to make government and unelected bureaucrats the arbiters of truth."

Senator Cash said the Coalition's proposal when it was in government was not the same, and would have worked with social media companies to ensure their fact-checking processes were better.

Shadow Communications Minister David Coleman said the bill was "appalling" and should never have been put forward, and would have had the effect of suppressing the free speech of Australians, as platforms would have censored content to avoid fines.

Greens senator Sarah Hanson-Young agreed the government's attempt was badly made.

"[It] was with all good intent, this policy, but badly and poorly explained and implemented. The practical implementation was just not there," Senator Hanson-Young said.

Gambling advertising kicked into next year, possibly next term

The government is jettisoning bills it has little chance of winning a vote on, as time runs out for it to complete its agenda.

Government sources have told the ABC a contentious bill to restrict gambling advertising will also not proceed this week, though it has not been formally abandoned.

Several Labor backbenchers called on their own party to be "brave" and introduce a complete ban on gambling advertising as recommended by late Labor MP Peta Murphy.

But the bill has been repeatedly delayed.

Frontbencher Murray Watt conceded the bill would not progress this week.

"There simply is not going to be enough time this week to pass that legislation," Senator Watt said.

Senator Hanson-Young rejected that the government had no time to pass gambling ad restrictions.

"Talk about priorities … rather than doing the hard work, rather than standing up to the vested interests of the big gambling companies and the big sporting codes and the big media companies, Anthony Albanese and Peter Dutton are squibbing it," she said.

The Albanese government has one week remaining to pass legislation this year, which could be the last sitting week of this government depending on when an election is called next year.