Townsville Mayor Troy Thompson hit with show cause notice from ...

Queensland's local government minister has issued an eleventh-hour show cause notice to Townsville Mayor Troy Thompson in a bid to oust him from the position.

State cabinet met last night to discuss legal advice surrounding the mayor continuing in the role.

Councillor Thompson has been under investigation by the Crime and Corruption Commission since May for misleading voters about his military, business and education credentials.

The move comes on the day the state election is being called and the government goes into caretaker mode.

Minister Meaghan Scanlon said the letter outlined the government's intention to suspend the mayor for 12 months.

"Based on the latest legal advice and the information in front of me, I reasonably believe it's in the public interest for the Townsville mayor to be suspended," Ms Scanlon said. 

She said Cr Thompson has been given three weeks to respond.

"These are very specific powers under the Local Government Act and I do not take those powers lightly," she said.

Meaghan Scanlon visited Townsville within hours of an eleventh-hour bid to suspend Troy Thompson as mayor. (ABC North Qld: Georgia Loney)

The letter claims Cr Thompson has hampered the Townsville City Council from performing its responsibilities to local residents efficiently and effectively and has unreasonably diverted council resources.

The government has also accused Cr Thompson of risking the welfare of council staff and damaging confidence in local government. 

Premier Steven Miles said the situation in Townsville was "getting worse, not better" and the best course of action was for the mayor to stand down.

In a statement posted on Facebook, Cr Thompson said he rejected every allegation made in the letter.

"These allegations have not been tested in a court of law, and it appears the Labor Government is attempting to subvert natural justice," he said.

"I have formally written to the minister, demanding that any actions she seeks to take be deferred until after the caretaker period.

"This is the only appropriate course of action."

In his letter of response to Ms Scanlon, Cr Thompson described the efforts to remove him as a "political hit job". 

He has also threatened to seek a Supreme Court injunction if further action is taken. 

Troy Thompson has previously been asked to resign by all 10 Townsville City Councillors. (ABC News: Lily Nothling)

Local Government Association of Queensland (LGAQ) chief executive officer Alison Smith said the organisation was disappointed by the lack of consultation from the state government before the show cause notice was issued. 

"It is absolutely crucial that any state intervention is based on proper process and sound reasoning which must also be transparent, measured and above politics," Ms Smith said. 

"Considerations must take into account any precedent it could set for the elected mayors and councillors of all 77 councils across Queensland."

Cr Thompson has resisted calls to stand down since May, when he participated in an interview with Nine's A Current Affair program. 

He apologised to veterans for inflating details of his military history during the council election campaign, blaming his poor memory on a string of concussions. 

Mayor Troy Thompson leaving his first council meeting since taking a leave of absence on June 5. (ABC News: Cameron Simmons)

Cr Thompson took a month of leave in June after all Townsville councillors moved a motion of no confidence against him but later returned to mayoral duties. 

In a statement, a Townsville City Council spokesperson said Cr Thompson would continue to be mayor during the show cause period. 

"Council continues to operate as per usual, with staff working to deliver services for the city of Townsville," the spokesperson said.