Australia's government rejected a newspaper report on Thursday that its controversial mining tax will raise $2.5 billion less in revenue in the first two years than expected, potentially threatening the budget surplus forecast for 2012/2013.

The Australian Financial Review newspaper, citing government sources, said the 30 percent tax was now likely to raise around A$5 billion ($5 billion), less than the A$7.4 billion last predicted and the A$10.5 billion expected in July, as projected commodity price and volume assumptions were unrealistic.

"Terms of trade forecasts were prudent, conservative and are broadly in line with those of the Reserve Bank and many private sector forecasts," Treasurer Wayne Swan's spokesman said in comments emailed to Reuters.

The Treasury last month forecast stronger growth and a budget surplus of A$3.1 billion in fiscal 2012/2013, with Swan promising any shortfall in the mining tax revenue would be offset by spending cuts.

The government aims to resolve key details of its new mining tax by early 2011, with draft legislation promised by May ahead of introduction in mid-2012.

Global miners BHP Billiton , Rio Tinto and Xstrata are expected to shoulder about 85 percent of the bill from the new tax. A further 320 mining companies showing annual profits of A$50 million or more, will pay the rest.

Treasury forecasts were independently set and signed off in both a pre-election budget statement and a mid-year economic and fiscal outlook (MYEFO) released in November, the spokesman said.

"Since MYEFO, spot prices for iron ore and coal have increased, with the RBA minutes as recently as this week noting there were further upside risks to its own terms of trade forecasts," he said.

Updated trade figures released on Wednesday showed China was Australia's largest export market and two-way trading partner in 2009-10, with total trade growing 8.8 percent to A$90.3 billion.

Australia's top two exports were coal, worth A$36.4 billion, and iron ore plus concentrates worth A$35.1 billion. Minerals export earnings are forecast to increase by 28 percent in fiscal 2010/11 to around $177 billion, according to official forecasts.

Earlier this week the country's miners appeared to have won a battle with the government when an influential tax panel recommended the government pick up future state royalty payments under the mine tax package.

Adopting such a recommendation would also pose a threat to revenues as any state royalty increase would cut into federal revenues.