The Leader is among hundreds of news outlets across the country banned from sharing stories on the social media platform, along with some state and territory health authorities and the Bureau of Meteorology.

The ban came after months of negotiations over a new media bargaining code, which passed the House of Representatives in the federal parliament on Wednesday night.

Tamworth state MP Kevin Anderson said the decision will leave Facebook filled with little but fake news.

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"I think what we would see if it's not sorted quickly is a rise in fake news. There's no veracity, there's no fact checking, that's why you have journos so you can provide that single source of truth," he said.

"We've seen that, when people start posting live on Facebook, there's no check, there's no balance. That's going to hurt regional NSW, that's going to hurt our people in our region when they do go to Facebook to get the facts, the truth and the source of it - it's not there."

Local news pages from radio stations in Tamworth have also been impacted by the ban. Tamworth leaders said the move was an effort to intimidate the government into backing down on the laws.

New England MP Barnaby Joyce said the ban threatened the democratic process itself.

"This is more important than just the sulking of a corporate entity. Because they have promoted themselves as a platform for the dissemination of one of the crucial elements of the democratic process. And now they remove themselves from one of the crucial elements of the democratic process, they're not slowly stepping away from it they're overnight removing it - they're actually affecting our democracy," he said.

He said the government would not be backing down to blackmail, and said the unprecedented blacklist was an escalation of negotiations.

"Australia's a test case for what happens around the world. The major platforms are playing hard ball. They're going to teach us a lesson as a warning to other countries, other people are watching to see how Australia goes.

"If you fall over on this now, you've given them free reign. Once you pick a fight you've kind of got to win it."

Tamworth mayor Col Murray said traditional media remained an essential tool, particularly for older residents of the region. But many young people get their news from social media, he said.

In the context of a pandemic, he said the Facebook ban was an irresponsible decision.

"That's probably what we're used to seeing when we get these commercial monopolies trying to run our lives, and whether we can do too much about that is the burning question. Just how broad the blanket will cover is the bits that we don't know," he said.

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Facebook released a statement on Thursday and said the proposed media bargaining code fundamentally misunderstood the relationship between its platform and publishers who used it to share news content.

"It has left us facing a stark choice: attempt to comply with a law that ignores the realities of this relationship or stop allowing news content on our services in Australia," the company's statement said.

"With a heavy heart, we are choosing the latter."

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