Australian Prime Minister Malcolm Turnbull has rejected the resignations of seven cabinet members despite them backing a rival for leadership, the country's foreign minister said on Wednesday, as Turnbull seeks to quell the threat of a renewed leadership challenge.

The Prime Minister on Tuesday survived a leadership bid from Peter Dutton, then Australia's Minister for Home Affairs, in a party room vote.

But the small margin of victory, narrowed by nine cabinet ministers backing Dutton, has stoked expectations that Turnbull will face another challenge in the near future.

Desperate to unite the fractured ruling party, Turnbull has asked the bulk of the cabinet rebels, including Australia's Trade Minister Steven Ciobo and Greg Hunt, minister for health to remain in their posts, Minister for Foreign Affairs, Julie Bishop said.

"A number of people who voted for Peter Dutton have in fact offered their resignations to the prime minister, they've done the right thing, but the prime minister has said that he wants them to remain in the ministry," Bishop told Australian Broadcasting Corporation radio.

Bishop said Dutton and Concetta Fierravanti-Wells, former Minister for International Development and the Pacific, have had their resignations accepted.Turnbull on Tuesday said he asked Dutton to remain his cabinet position but Dutton declined, a move widely seen as a precursor for another challenge as he works to secure the seven votes within the Liberal Party he needs to become the Australia's sixth prime minister since 2009.

Although Dutton has refused to outline whether he intends to challenge Turnbull, the conservative lawmaker on Wednesday began to outline his policy agenda should he succeed in a renewed bid.

"We pay some of the highest prices in the world for electricity and fuel. I think these are the kind of things we should be working on and if we do, I believe people will strongly support the government," Dutton told Triple M Radio.

Dutton's comments suggest that further political instability will continue to afflict the government in the final two days of parliament's sitting before it breaks until September.

Turnbull came to power in a party-room coup in September 2015 when he ousted former premier Tony Abbott who also survived an internal leadership contest before his eventual defeat.

A social liberal and multi-millionaire former merchant banker, Turnbull rode an early wave of popular support but his standing has diminished significantly.

He has struggled to appeal to conservative voters, while progressive supporters have been disappointed as they watched government policies shift to the right as Turnbull tried to appease a powerful right-leaning backbench.

The uneasy unity held sufficiently to secure a narrow election victory in 2016.

However, that fragile peace was broken this week by the weakening of the government's centrepiece energy policy, which had included the imposition of a target of a 26 percent reduction in greenhouse emissions from Australia's energy generators, an issue that has repeatedly divided the government.</s>JUST a day after Peter Dutton said he would go quietly to the backbench, the former home affairs minister has revealed he is "working the phones" to win the prime ministership.

Now it is starting to emerge that Mr Dutton's camp claim to have 40 out of 43 votes needed to call another Liberal partyroom meeting which could happen as soon as this afternoon or tomorrow.

Other names are also being thrown around including Scott Morrison and Julie Bishop, with some reports indicating Mr Morrison is attempting to put together a ticket to run with Mr Dutton as his deputy.

But Mr Morrison has reportedly rejected that idea, saying he fully supports Mr Turnbull.

The showdown could happen as soon as before Questime Time at 2pm, with The Courier Mail reporting key backers of Mr Turnbull's have switched to the Dutton camp, likely sparking a mass Cabinet reshuffle.

Speaking to 3AW this morning, Mr Dutton said he was campaigning to gain the numbers to run a second successful challenge against Mr Turnbull.

"You don't go into a ballot believing you're going to lose and if I believe that a majority of colleagues support me, then I would consider my position," he said.

"Of course I am (working the phones). I'm speaking to colleagues. I'm not going to beat around the bush with that."

The would-be Liberal leader has also unveiled his grand plans to save Australia.

In a bid to win over voters, Mr Dutton has outlined his policies with an immediate focus on removing the GST from power bills, which would be an automatic 10 per cent reduction.

He also wants a Royal Commission into the energy and fuel companies he thinks are rorting the country because Australians are paying some of the highest energy bills in the world.

Meanwhile, Mr Turnbull has suffered another devastating body blow, with the Senate voting down his signature company tax cut policy by 36 votes to 30.

The Prime Minister is steeling himself for the next assault, with Mr Dutton thought to be preparing for a second challenge on the leadership within days.

There are now reports Scott Morrison i according to 4BC's Ray Hadley.

"It would be an automatic reduction of 10 per cent. People would feel an impact straight away, it would be a down payment on other things you could do to help reduce electricity bills.

"The other thing I think we could do is I think we could set up a Royal Commission into electricity and fuel companies. Australian consumers have been paying way too much for way to long and something just isn't right."

He said people were struggling to understand what the government stood for.

"In a country where we've got an abundance of natural resources, of renewables, of coal of hydro, yet we're paying some of the highest costs for energy in the world and similarly for fuel," he said.

"They're the sorts of things we need to talk about and should be working on and if we do, I believe that people will strongly support the government."

Triple M's The Hot Breakfast hosts asked Mr Dutton to detail his career history, background and upbringing so Australians could understand the "down-to-earth" side of him he said they often did not see.

He also couldn't name his favourite AC/DC song because he said he had not had much sleep.

Mr Turnbull had the same reaction on Triple M last year, but instead provided a Mental as Anything song.</s>ACT Liberal senator Zed Seselja remains an assistant minister in the Coalition government despite offering Prime Minister Malcolm Turnbull his resignation after backing Peter Dutton in Tuesday's leadership spill.

Senator Seselja was among several assistant ministers who supported Mr Dutton in the shock ballot won by Mr Turnbull 48-35.

Fairfax Media understands the ACT senator voted for Mr Dutton believing he was best able to speak to conservative voters lost since the last leadership change in 2015, and bring them back to the Coalition.

His support for the former Home Affairs minister also reflected a belief the Coalition had meandered too much on policy, including the national energy guarantee that brought on the party's ruction, it is understood.

Senator Seselja's fears of losing the Liberal party's conservative voters stretch back to Mr Turnbull's victory over Tony Abbott in a move seen then as a return to more moderate policies.</s>Attorney-General Christian Porter has referred the issue of Peter Dutton's eligibility to sit in Parliament to the the federal government's top legal officer for advice ahead of a looming leadership spill between the former home affairs minister and Prime Minister Malcolm Turnbull.

The request for assistance from the Solicitor-General comes as separate legal advice, authored by prominent Sydney silk Bret Walker, SC, concludes that Mr Dutton was likely "incapable of being chosen for the 45th Parliament and is not entitled to continue to sit in the 45th Parliament".

The movements come after Fairfax Media revealed the childcare company operated by Mr Dutton's family trust had received more than $5.6 million in Commonwealth funding since 2014.

The Labor-commissioned document, obtained by Fairfax, was distributed to Mr Porter and Mr Turnbull earlier this afternoon after the Prime Minister said he had not read Mr Dutton's legal advice.

The advice, requested by Labor national secretary Noah Carroll in April, reads: "The resolution of these issues, for the reasons that follow, leads us to the conclusion that it is clearly arguable that Mr Dutton is not eligible to so sit in the 45th Parliament and potentially not eligible to have been chosen for the 45th Parliament. We are of the view that this is the preferable argument."</s>Australian Minister for Home Affairs Peter Dutton, left, leaves after a party room meeting at Parliament House in Canberra, Tuesday, Aug. 21, 2018. Australia's Prime Minister Malcolm Turnbull survived a leadership challenge, defeating Dutton in an internal government ballot that is unlikely to settle questions of his support. (Mick Tsikas/AAP Image via AP) less

Australian Minister for Home Affairs Peter Dutton, left, leaves after a party room meeting at Parliament House in Canberra, Tuesday, Aug. 21, 2018. Australia's Prime Minister Malcolm Turnbull survived a ... more

Australian Minister for Home Affairs Peter Dutton, left, leaves after a party room meeting at Parliament House in Canberra, Tuesday, Aug. 21, 2018. Australia's Prime Minister Malcolm Turnbull survived a leadership challenge, defeating Dutton in an internal government ballot that is unlikely to settle questions of his support. (Mick Tsikas/AAP Image via AP) less

Australian Minister for Home Affairs Peter Dutton, left, leaves after a party room meeting at Parliament House in Canberra, Tuesday, Aug. 21, 2018. Australia's Prime Minister Malcolm Turnbull survived a ... more

Australian Liberal Party deputy leader Julie Bishop, left, and Prime Minister Malcolm Turnbull address reporters at Parliament House in Canberra, Australia, Tuesday, Aug. 21, 2018. Turnbull called on his government to unite behind him after he survived a leadership challenge, defeating a senior minister in an internal ballot that is unlikely to settle questions of his support. less

Australian Liberal Party deputy leader Julie Bishop, left, and Prime Minister Malcolm Turnbull address reporters at Parliament House in Canberra, Australia, Tuesday, Aug. 21, 2018. Turnbull called on his ... more

Australian Liberal Party deputy leader Julie Bishop, left, and Prime Minister Malcolm Turnbull arrive to address reporters at Parliament House in Canberra, Australia, Tuesday, Aug. 21, 2018. Turnbull called on his government to unite behind him after he survived a leadership challenge, defeating a senior minister in an internal ballot that is unlikely to settle questions of his support. less

Australian Liberal Party deputy leader Julie Bishop, left, and Prime Minister Malcolm Turnbull arrive to address reporters at Parliament House in Canberra, Australia, Tuesday, Aug. 21, 2018. Turnbull called on ... more

Australian Prime Minister Malcolm Turnbull address reporters at Parliament House in Canberra, Australia, Tuesday, Aug. 21, 2018. Turnbull called on his government to unite behind him after he survived a leadership challenge, defeating a senior minister in an internal ballot that is unlikely to settle questions of his support. less

Australian Prime Minister Malcolm Turnbull address reporters at Parliament House in Canberra, Australia, Tuesday, Aug. 21, 2018. Turnbull called on his government to unite behind him after he survived a ... more

Australian Prime Minister Malcolm Turnbull address reporters at Parliament House in Canberra, Australia, Tuesday, Aug. 21, 2018. Turnbull called on his government to unite behind him after he survived a leadership challenge, defeating a senior minister in an internal ballot that is unlikely to settle questions of his support. less

Australian Prime Minister Malcolm Turnbull address reporters at Parliament House in Canberra, Australia, Tuesday, Aug. 21, 2018. Turnbull called on his government to unite behind him after he survived a ... more

CANBERRA, Australia (AP) — A government lawmaker said on Wednesday he was planning a second challenge against Australia's prime minister after losing a leadership ballot, ensuring that Australia's political instability continues.

Prime Minister Malcolm Turnbull called on his government to unite behind him after lawmakers in the ruling conservative Liberal Party chose to keep him as their leader 48 votes to 35 in a ballot on Tuesday.

Turnbull surprised his enemies by calling the ballot before his challenger Peter Dutton had had time to lobby colleagues for support.

But Dutton confirmed that he was now sounding out support for a second challenge.

"I am not going to beat around the bush on that, I am speaking to colleagues," Dutton told Melbourne Radio 3AW.

"You don't go into a ballot believing you're going to lose, and if I believe that a majority of colleagues support me, then I would consider my position," he added.

Dutton has dashed Turnbull's hopes of unifying the conservative coalition under his leadership ahead of general elections due by May.

Dutton also used various media interviews on Wednesday to suggest new policy directions, including reduced tax on electricity bills and reduced immigration.

Turnbull suggested he still had the support of a majority of his party.

"The iron laws of arithmetic confirmed my leadership of the Liberal Party," he told reporters on Wednesday at a joint news conference with Treasurer Scott Morrison and Finance Minister Mathias Cormann.

Both ministers also declared their support for Turnbull.

Australia has had years of political instability since Prime Minister John Howard lost power in 2007 after more than 11 years in office. No prime minister has lasted a full three-year term since. They have all been thrown out of power by their own parties in the face of poor opinion polling.

Darren Chester, a minister in The Nationals party, the junior coalition partner, has threatened to take away the government's single-seat majority in the House of Representatives if Turnbull was deposed.

Chester said he and other lawmakers were considering quitting a government that was not led by Turnbull, which could force an election.

"I know of other colleagues who are deeply worried about" Turnbull being overthrown, Chester said.

Another 10 ministers who supported Dutton's challenge have also offered their resignations, but it is not clear how many the prime minister has accepted.

Turnbull said Dutton's was the only senior minister's resignation he accepted. It was not clear if Turnbull had accepted the resignations of junior ministers outside Cabinet.

"What I'm endeavoring to do is to obviously ensure that the party is stable, to maintain the stability of the government of Australia. That's critically important," Turnbull said.

"So the Cabinet ministers, apart from Peter Dutton, of course, who came to me and told me that they had voted for Mr. Dutton in the leadership ballot, have given me unequivocal assurances of continuing loyalty and support," he added.</s>PETER Dutton is working overtime to convince Australia that he has a "down-to-earth" side that simply isn't immediately obvious.

The 47-year-old enjoys a drink, watching the kids play footy and sharing the odd self-deprecating joke, he has revealed. He cannot name an AC/DC song, but only because he is sleep-deprived.

In fact, the man pushing to be the next Prime Minister differs from the average Australian because of his significant wealth.

He bought his first property at the age of 18 and he and wife Kirilly have built up a portfolio, which includes a $2.3 million, four-bed mansion in Palm Beach, on the Gold Coast's "Millionaire's Row", and a Townsville shopping mall.

They live on a two-hectare block at Camp Mountain in Mr Dutton's electorate, with their sons Harry, 14, and Tom, 12. Mr Dutton also has a 16-year-old daughter, Rebecca.

They have purchased other properties in Queensland and Canberra.

Mr Dutton is the eldest of five children. His father Bruce was a builder and mother Ailsa Leitch worked in childcare.

He was an industrious youngster, who delivered newspapers and mowed lawns, forging his respect for individualism, reward for achievement and traditional values.

After finishing high school at the Anglican St Paul's in Brisbane, he joined the Young Liberals and studied at the Queensland Police Academy while helping his dad with building projects.

He spent nine years in the police force, working with the drug squad and sex offenders squad, before leaving in 1999 to gain a Bachelor of Business from the Queensland University of Technology.

In 2000, Bruce and his son registered a business, which bought buildings and converted them into childcare centres.

Mr Dutton won the seat of Dickson, in north-west Brisbane, from Labor's Cheryl Kernot in 2001, before becoming Minister for Workforce Participation and then Assistant Treasurer and Minister for Revenue.

He married his first wife aged 22 but the relationship ended after a few months. He had his daughter with another partner before marrying Kirilly Brumby in 2003, with whom he has two sons.

In June 2007, he was forced to deny a conflict of interest relating to his childcare centre business when Labor said he had "serious questions to answer", the Courier Mail reported.

Penny Wong urged then-Prime Minister John Howard to investigate whether he had breached the code of conduct and profited personally from policy decisions.

Mr Dutton said ABC Learning Centres paid rent of $100,000 a year for a former church which the Duttons bought, renovated and turned into a childcare centre. Dutton Holdings sold it and two other childcare centres to ABC Learning in 2002.

"I am proud of the business I was in and built up from nothing," said Mr Dutton. "Everything has been declared … I have been perfectly open about this from day one."

He also confirmed he had received two donations, $5000 and $10,000, to his election campaign from ABC Learning boss and Brisbane businessman Eddy Groves, in 2004.

The same month, Labor attacked Mr Dutton over a $75,000 bill for a seven-day parliamentary trip to the US with his wife, taken the previous year.

Mrs Dutton, 44, owns and runs the Camelia Avenue Childcare Centre and Bald Hills Childcare Centre in Brisbane's north-west. Both are owned by RHT Family Trust, of which the family are all beneficiaries, according to ASIC documents.

The Government's childcare reforms came into effect on July 2, meaning centres receive Commonwealth subsidies, which are passed on to parents.

This could mean Mr Dutton has a "direct or indirect pecuniary interest with the Public Service of the Commonwealth", meaning a disqualification from Parliament.

Mr Dutton says he has legal advice his business affairs were above board, but Labor claims it has legal advice that he is ineligible for Parliament.

The Attorney-General will now have to decide whether to refer the matter to court to decide whether there has been a disqualification.

In his first speech to federal Parliament 16 years ago, Mr Dutton paid tribute to his parents.

"Their outstanding quality is their tenacity," he said in February 2002.

It's a quality many attribute to the 47-year-old as well. He's often said that as a police officer for almost a decade in the 1990s, he saw the "best and the worst that society has to offer".

In his maiden speech, he said: "I have seen the wonderful, kind nature of people willing to offer any assistance to those in their worst hour, and I have seen the sickening behaviour displayed by people who, frankly, barely justify their existence in our sometimes over-tolerant society."

He said "unacceptable crime rates" were "causing older Australians to barricade themselves in their homes."

And he claimed the "boisterous minority" and the "politically correct" have a disproportionate role in public affairs, attacking "the dictatorship of the trade union movement."

And he criticised the Civil Liberties Council, "otherwise known as the criminal lawyers media operative, who appear obsessed with the rights of criminals yet do not utter a word of understanding or compassion for the victims of crime."

He also spoke out about the inadequacy of prison sentences: "Time after time we see grossly inadequate sentences being delivered to criminals whose civil rights have far exceeded those of the victim and others in our society. This imbalance must be addressed, and for the sake of living standards and reasonable expectations for all Australians must be addressed as a matter of urgency."

Mr Dutton has generally performed well as a hard-working minister in a seat full of aspiring small business people. But as the 2010 election approached, polling showed Mr Dutton was at risk of losing Dickson and he tried to jump ship to a seat on the Gold Coast, with no plans to relocate. He lost a preselection bid, but was re-elected in Dickson.

Mr Dutton is often slammed as the hard-nosed immigration minister who "stopped the boats" by militarising the department with "Operation Sovereign Borders" and taking a cold approach to the health and wellbeing of asylum seekers in offshore detention - sending the strongest possible signal to people-smugglers.

His position as Home Affairs Minister marked an expansion of the role. He has now stepped down following the leadership spill, and is trying to find the numbers to challenge again.

Mr Dutton said this week that he would like nothing more than to get people off Manus and Nauru to the Australian mainland, but was afraid for them drowning.

He has been at the centre of many other controversies too, once describing a journalist as a "mad f***ing witch" - for which he later apologised.

He joked about climate change causing ocean levels to rise and destroy island nations under a boom mic. He was vocally anti marriage equality and said there was a "mistake made" in the past when it came to Lebanese immigration levels.

In 2008, he was the only frontbencher to boycott Kevin Rudd's apology to the Stolen Generations, offering to quit the shadow ministry. He told the ABC's Q&A in 2010 he saw it as "something which was not going to deliver tangible outcomes to kids who are being raped and tortured in communities in the 21st century", but said the regretted the decision in an interview with Fairfax last year. "I didn't appreciate the symbolism of it and the importance to indigenous people," he said.

He was also criticised for championing the controversial policy of charging $7 GP co-payments, drawing the ire of the medical industry. In January, he said Melbourne residents were "scared to go out to restaurants" because of "African gangs".

Mr Dutton has sometimes shown a more empathetic side, overturning visa decisions when special cases are put to him. He offered support to Yazidis held captive by Islamic State in Iraq and Syria.

"Not everyone loves him, that's for sure," said his Canberra flatmate, Liberal MP Steve Ciobo.

"But that's a consequence of him being a straight shooter."</s>CANBERRA (Reuters) - Australian Prime Minister Malcolm Turnbull rejected the resignations of seven Cabinet members who backed a rival for leadership, Foreign Minister Julie Bishop said on Wednesday, as he seeks to quell a renewed bid by a conservative challenger.

Turnbull survived a leadership bid from former home affairs minister Peter Dutton in a party-room vote on Tuesday but the narrow margin of his victory heightened speculation that his leadership days were numbered.

Expectations that Turnbull would soon face another challenge, possibly within days, were stoked when eight Cabinet ministers backed Dutton.

Turnbull is desperate to unite the fractured Liberal Party, the senior party in the government coalition. He asked the bulk of the Cabinet rebels, including Trade Minister Steven Ciobo and Health Minister Greg Hunt, to remain in their posts, Bishop said.

“A number of people who voted for Peter Dutton have in fact offered their resignations to the prime minister, they’ve done the right thing, but the prime minister has said that he wants them to remain in the ministry,” Bishop told Australian Broadcasting Corporation radio.

Bishop said the resignations of Dutton and Concetta Fierravanti-Wells, the former minister for international development and the Pacific, were accepted.

Dutton refused Turnbull’s request on Tuesday to remain in Cabinet, a move widely seen as a precursor to another challenge as he works to secure the seven Liberal Party votes he needs to become Australia’s sixth prime minister since 2009.

He had been coy on his immediate plans after his party-room defeat but declared on Wednesday he was working to secure the necessary support.

“If I believe the majority of colleagues support me then I will consider my position,” he said.

Further political instability is now all but guaranteed in the final two days of parliament’s sitting before it breaks until September, potentially upsetting Australia’s financial markets.

Australia’s stock market fell more than one percent on Tuesday, its biggest drop in five months.

Turnbull came to power in a party-room coup in September 2015 when he ousted former prime minister Tony Abbott, who also survived an internal leadership contest before his eventual defeat.

A social liberal and multi-millionaire former merchant banker, Turnbull rode an early wave of popular support but his standing has diminished significantly.

He has struggled to appeal to conservative voters, while progressive supporters have been disappointed as they watched government policies shift to the right as Turnbull tried to appease a powerful right-leaning backbench.

The uneasy unity held sufficiently to secure a narrow election victory in 2016.

However, that fragile peace was broken this week by the weakening of the government’s centrepiece energy policy, which had included the imposition of a target of a 26 percent reduction in greenhouse emissions from Australia’s energy generators, an issue that has repeatedly divided the government.</s>CANBERRA, Australia (AP) — A government lawmaker said on Wednesday he was planning a second challenge against Australia's prime minister after losing a leadership ballot.

Prime Minister Malcolm Turnbull called on his government to unite behind him after lawmakers in the ruling conservative Liberal Party chose to keep him as their leader 48 votes to 35 in a ballot on Tuesday.

Turnbull surprised his enemies by calling the ballot before his challenger Peter Dutton had had time to lobby colleagues for support.

But Dutton confirmed that he was now sounding out support for a second challenge.

"I am not going to beat around the bush on that, I am speaking to colleagues," Dutton told Melbourne Radio 3AW.

"You don't go into a ballot believing you're going to lose, and if I believe that a majority of colleagues support me, then I would consider my position," he added.

Dutton has dashed Turnbull's hopes of unifying the conservative coalition under his leadership ahead of general elections due by May.

Australia has had years of political instability since Prime Minister John Howard lost power in 2007 after more than 11 years in office. No prime minister has lasted a full three-year term since. They have all been thrown out of power by their own parties in the face of poor opinion polling.

Darren Chester, a minister in The Nationals party, the junior coalition partner, has threatened to take away the government's single-seat majority in the House of Representatives if Turnbull was deposed.

Chester said he and other lawmakers were considering quitting a government that was not led by Turnbull, which could force an election.

"I know of other colleagues who are deeply worried about" Turnbull being overthrown, Chester said.

Another 10 ministers who supported Dutton's challenge have also offered their resignations, but it is not clear how many the prime minister has accepted.</s>PETER Dutton has asked Malcolm Turnbull to call a party room meeting where he will challenge him for Prime Minister.

The former home affairs minister has tweeted his intentions, believing he has the support of majority of the Liberal party room to be successsful in his attempt to take the top job.

EARLIER: MALCOLM Turnbull has been hit with further blows this morning with two of his Ministers officially resigning.

The Liberals' leadership uncertainty has entered its third day after a shambolic night.

MPs linked to contender Peter Dutton attempted to launch a petition forcing Mr Turnbull into a late night showdown.

It was a fizzer which only managed to antagonise some Liberals.

A furious senior Turnbull supporter told the Daily Telegraph Mr Dutton's side had spread "lying propaganda" in an effort to pressure their colleagues into a vote, including rumours that key minister Mathias Cormann had flipped.

One Liberal MP has reportedly told the Australian Financial Review that the Whip's office has received four complaints from female MPs saying they felt intimidated when asked to sign the petition, which they refused to do.

MPs expect a second leadership spill, following Tuesday's vote won by Mr Turnbull, some time today.

Ministers Michael Sukkar and Zed Seselja have resigned this morning, Sky News reports, while James McGrath resigned last night.

Mr Sukkar and Mr Seselja refused Mr Turnbull's offer to remain as Ministers despite voting for Mr Dutton in Tuesday's spill.

Meanwhile there are serious questions as to whether Mr Dutton, the former home affairs minister, can sit in Parliament let alone become Prime Minister.

Labor has produced an opinion from Brett Walker SC to the effect Mr Dutton is ineligible to sit in Parliament because he has breached a section of the Constitution.

The specific part of S44 prevents MPs from having a direct or indirect pecuniary interest related to a Commonwealth public servant.

Mr Dutton's wife has child care business which benefits from Commonwealth subsidies. Mr Dutton has said his own legal advice is there has been no breach.

But Attorney-General Christian Porter has referred the matter to the Solicitor-General.

Mr Dutton's petition needs 43 signatures to force the Prime Minister to call a party room meeting, but Mr Turnbull may decide he has no choice with his position in such doubt.

If PM does not call a spill imminently, it cannot happen for two weeks, with Parliament going on a fortnight's break.

But it's not clear how many signatures Mr Dutton has managed to obtain, with Liberal MP and Turnbull supporter Jane Prentice saying around nine politicians had signed the letter but Sky News this morning reporting that figure has risen to 25.

Just three Liberals told the ABC they had done so.

The Prime Minister's future hangs in the balance, but he remained stoic on a night of rampant rumour and intrigue, in which the much-discussed petition failed to come out and force a Liberal leadership vote.

Mr Dutton has made it clear he wants another spill today, after losing the first by a narrow margin of 48-35 votes and resigning from his role as Home Affairs Minister.

The backbencher revealed yesterday he was "working the phones" to win the prime ministership.

His letter was circulated to MPs at 6.30pm yesterday but by 8pm, a spokesman for the Government's chief whip Nola Marino ruled out the possibility of a party room meeting for the night.

Governor-General Sir Peter Cosgrove had been due to leave Canberra but The Australian was told he decided it would be best to remain in the capital "at this time".

Ten ministers who backed Mr Dutton in the vote offered to resign on Tuesday, but Mr Turnbull only accept that of Mr Dutton and former international development minister Concetta Fierravanti-Wells.

Assistant to the Prime Minister James McGrath last night went to the PM and insisted Mr Turnbull accept his resignation.

"The people who have for all their lives counted on us to look after them and their families are now questioning our commitment to them," said the Queensland senator in his resignation letter. "Our people feel forgotten, ignored and spoken down to. As a Liberal National Party Senator for Queensland, this is an intolerable situation.

"Like Peter Dutton has said, we must do everything in our power to stop Bill Shorten ever becoming Prime Minister.

Three years ago, Mr McGrath was instrumental in helping Mr Turnbull replace Tony Abbott as Prime Minister.

If more ministers follow his lead in insisting on resigning, Mr Turnbull will be left in a nightmare position.

The list of those who offered to go included Cabinet ministers Greg Hunt, Michael Keenan and Steve Ciobo, threatening the PM's ability to govern.

As Mr Dutton battles to prove his leadership qualities, Labor has thrown a spanner in the works by claiming he may have breached the Constitution and be ineligible.

His wife Kirilly owns and operates two childcare centres, owned by RHT Family Trust, of which the family are all beneficiaries, according to ASIC documents.

The business receives Commonwealth subsidies under the Government's childcare reforms, which came into effect on July 2. It has received $5.6 million in taxpayer-funded rebates over the past eight years, according to The Australian, which are passed on to families.

This could mean Mr Dutton has a "direct or indirect pecuniary interest with the Public Service of the Commonwealth", or a case of an office of profit under the Crown, which would lead to a disqualification from Parliament.

There is no evidence he has breached the Constitution on these grounds, and Mr Dutton has legal advice his business affairs were above board. But Labor has also obtained advice, and says there's a problem.

In a letter obtained by News Corp Australia reporter Claire Bickers, Shadow Attorney-General Mark Dreyfus wrote to Attorney-General Christian Porter, citing advice from barrister Bret Walker declaring Mr Dutton ineligible.

"Mr Dutton was incapable of being chosen for the 45th Parliament and is not entitled to continue to sit," the advice states.

Mr Porter said in a statement last night that he had referred questions over Mr Dutton's eligibility to sit in Parliament to the Solicitor-General.

The Prime Minister told Parliament yesterday he had not seen the legal advice and was not in possession of all the facts.

"The Member for Dickson has advised me he is not in breach of section 44 and I have no reason there to believe he is," said Mr Turnbull.

"As far as the solicitor-general is concerned, the matter has only arisen in very recent times and we are not in possession of all the facts relating to the arrangements between the childcare centre and the member for Dickson's trust."

Labor asked if Mr Dutton had excused himself from cabinet during talks about the childcare funding changes, as he had done in previous governments and Mr Turnbull said he would report back after seeking advice from the cabinet secretary.

Mr Dutton's supporters reacted with fury, with one senior conservative MP telling The Australian: "It is unbelievable that he would threaten the government's majority to try and save his leadership.

"It has scared a lot of members and senators that he would have thrown a member of his team under a bus."

The PM yesterday afternoon held a news conference, flanked by Treasurer Scott Morrison and Finance Minister Mathias Cormann to admit defeat after one of their signature economic reforms - tax cuts for big business - was killed in the Senate.

The embarrassing podium performance outside Parliament House involved an awkward hug from Mr Morrison when asked if he could rule out any leadership ambitions. "This is my leader and I'm ambitious for him," he said as he put his arm around Mr Turnbull.

Support from the pair is vital for Mr Turnbull as he fights to survive.

Mr Cormann was last night under pressure to make a choice between the PM and Mr Dutton. The Finance Minister reportedly told Mr Turnbull he had lost the support of his party room in a meeting, according to The Australian.

However, Mr Turnbull, Mr Morrison and Mr Cormann poured cold water on the policy plans Mr Dutton announced yesterday, particularly his move to remove the GST from power bills, which would mean an automatic 10 per cent reduction.

He also called for "record spending" in the areas of health, education and aged care.

Mr Morrison said such a proposal would cost about $7.5 billion over four years. "That would be a Budget blower, an absolute Budget blower," he said. "And you can make all sorts of promises about how much money you're going to spend, but at the end of the day, you've got to account for it."

Labor Treasury spokesman Chris Bowen called the idea a "crazy thought bubble" that would ­deprive the states of revenue for hospitals.

Mr Dutton's issues with both policy and popularity were highlighted yesterday as he tried valiantly to prove he was just an everyday Australian.

Triple M's Hot Breakfast hosts asked him to detail his career history, background and upbringing so Australians could understand the "down-to-earth" side of him he said they often did not see.

He said he couldn't name his favourite AC/DC song because he said he had not had much sleep. Mr Turnbull had the same reaction on Triple M last year, but instead provided a Mental as Anything song.

Some say Julie Bishop or Mr Morrison or even former Prime Minister Tony Abbott might have a better chance of defeating Labor leader Bill Shorten at election than Mr Dutton.

But Ms Bishop yesterday repeated that she was not "considering or canvassing any of those options". She told Nine she was "focusing all of my energy and attention" on her job as Foreign Minister and as the member for Curtin.

She also downplayed the possibility of a Dutton leadership, saying a number of people who voted against Mr Turnbull have reconsidered their position and that she didn't "envisage" it happening.

"I believe that the Prime Minister has been endorsed by a majority of the party room … and understand that a number of people who didn't vote for him have now said they will back him," she told ABC radio on Wednesday.

She said she was surprised Mr Dutton had challenged Mr Turnbull on Tuesday. "I thought that the interests of the party were to unite behind a set of policies that would be delivered for the Australian people," she told the Nine Network.

"But everybody has a right to stand if they believe that is in the interests of the party and in the interests of the party and in the interests of the country."

She also told Sky News Mr Cormann had backed Mr Turnbull in the vote, after his silence afterwards sparked speculation about who he supported.

"Mathias is very busy focusing on implementing the coalition's policies through the Senate, and I understand he is supporting the Prime Minister and will continue to do so," Ms Bishop confirmed.</s>"The Prime Minister has said that he wants them to remain in the ministry"

Those who offered their resignations had all backed former Home Affairs Minister Peter Dutton in the leadership challenge, which was narrowly defeated.

The challenge was for the leadership of the centre-right Liberal Party, the dominant partner in the coalition government.

Foreign Minister Julie Bishop told ABC: “A number of people who voted for Peter Dutton have in fact offered their resignations to the Prime Minister.

“They’ve done the right thing, but the Prime Minister has said that he wants them to remain in the ministry.”
Australian Prime Minister Malcolm Turnbull survives a challenge by conservative Home Affairs Minister Peter Dutton for leadership of the Liberal Party, with 48 votes to 35.