A China-led consortium seeking to buy Australia's S. Kidman & Co will hold off on a fresh bid for the country's largest agricultural land owner amid concerns it could be derailed by a more protectionist new government, two sources with direct knowledge of the matter said.

Australia rejected a A$371 million ($282 million) bid by the group - headed by Hunan Dakang Pasture Farming Co Ltd with a minority 20 percent Australian interest - in April, concluding the offer for Kidman and its agricultural land, about the same size as Ireland, was not in the national interest.

Dakang had been expected to revise its bid shortly after Australia's July 2 national election, boosting the local component. However, the new-look coalition government has even more foreign investment skeptics than the previous one, with the rural-centric Nationals party increasing its numbers in the ruling center-right coalition.

Although Kidman and Dakang are eager to complete the sale, three people familiar with the process said any deal may prove insufficient to win over key Australian government figures and a rising tide of anti-foreign investment.

"I think we are in for a period of protectionism government," a source familiar with the negotiations said.

"Things have been parked until the government has settled in and we try to get some sort of understanding of their sentiment towards foreign investment and in particular levels of comfort around thresholds of offshore involvement."

Foreign ownership of farmland and rural businesses is a sensitive issue due to concerns that cashed-up overseas companies can out-bid smaller local players for key assets. Local ownership of agriculture is also seen as crucial for Australia to cash in on global food demand and keeping tax revenues onshore.

Kidman refused to comment on the sale.

Ernst and Young's South Australia managing partner Don Manifold, who is handling the sale for the Kidman shareholders, said the process was still going.

"Kidman is for sale and we are talking with interested parties," Manifold said.

Foreign investment in agribusiness valued at more than A$55 million is screened by Australia's Foreign Investment Review Board where a bid is subjected to a national interest test. This includes considering the impact on local employment and tax revenue.

While a final decision rests with Treasurer Scott Morrison, prominent members of the coalition, including Deputy Prime Minister Barnaby Joyce, have long opposed an escalation in foreign investment in agricultural assets.

A source close to Joyce said there was no definitive threshold for Australian participation, but a Dakang deal with 49 percent local ownership stood a better chance of winning favor.

The Kidman business includes 10 cattle stations with an average herd of 185,000, covering more than 100,000 square kilometers (25 million acres), or 1.3 percent of Australia's total land area.

Morrison rejected the consortium's bid to buy nine Kidman cattle properties in April, in the lead-up to the federal election, the second foreign-based offer for Kidman refused by the government.

The rejection came even after the bidders included locally owned Australian Rural Capital Ltd as a 20 percent minority stakeholder and carved out an area bordering sensitive military testing grounds.

Other interested parties include wealthy Australian business people, a source familiar with the sale process said, without giving details, while crowdfunder DomaCom and local consultants Lloyds Business Brokers have put together an ambitious joint offer.

Lloyds Victoria director Chris Butchers said the broker could raise A$160 million to purchase the cattle operations, while Domacom was still raising the anticipated A$210 million it required to buy the land.

($1 = 1.3170 Australian dollars)