Liberal Senator Eric Abetz uses racial slur live on air

Jacqui Lambie has urged fellow Tasmanian senator Eric Abetz to quit parliament after he used a racial slur during a live radio interview.

The Liberal senator used the word "negro" while speaking with 2UE host Justin Smith yesterday afternoon while defending his opposition to gay marriage.

Senator Lambie told Fairfax Media Mr Abetz had become "erratic" after being dumped from cabinet.

"Whatever integrity… he's got left, he probably should get out now," she said.

"If I were Malcolm Turnbull I'd be keeping a very close eye on him."

Mr Abetz dropped the slur during a discussion on whether a baker refusing to make a wedding cake for a gay couple was the same as discriminating on the basis of race.

"Those sort of analogies are quite offensive and that sort of analogy was completely debunked by Justice Clarence Thomas, the negro American on the Supreme Court of the United States dealing with this issue … who dissented on the issue of marriage as well," Mr Abetz said.

"Negro?" Smith replied, only for Mr Abetz to continue.

"Trying to bring race into it has now been completely dropped," he said.

Senator Abetz, a key ally of former prime minister Tony Abbott, was dumped as employment minister and leader of the government in the upper house by Malcolm Turnbull in September.

The senator is no stranger to controversy, having come under fire in August last year after saying numerous studies had "asserted there is a link between abortion and breast cancer".