Malcolm Turnbull: Under-pressure Australia PM drops climate policy

Mr Turnbull said yesterday company tax cuts remained on the parliamentary agenda, but there were reports he meant to put a plan to ditch the policy to last night's meeting.

Mr Turnbull faces his most critical week since coming to office and will return to Parliament today to be greeted by conservative backbenchers approaching revolt, an Opposition cheering on his leadership rivals and a Senate hostile to his signature economic policy, company tax reform.

Prime Minister Malcolm Turnbull has narrowly survived a leadership spill against Home Affairs Minister Peter Dutton by 48 to 35 votes after a sudden challenge on Tuesday morning.

While several backers of Mr Dutton have admitted to a "wait and see approach", nine cabinet ministers were ready to get behind the Home Affairs Minister - half of cabinet's 18 Liberals, The Australian reported.

"He (Mr Turnbull) looks like he's in panic mode", a "senior figure" involved in the campaign against the Prime Minister told the newspaper.

In the Liberal Party room meeting that began a short while ago, Turnbull has declared the leadership of the Liberal Party vacant.

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"The reaction to the (National Energy Guarantee) announcement has been disbelief".

"Emissions targets that made sense three years ago.do not make sense now", Mr Abbott said.

About 10 coalition MPs have expressed concern the government's commitment to its Paris emissions-cut target is being prioritised ahead of cutting power prices.

"I think the Australian public throw up their hands and say, "You guys in Canberra are playing games, putting your own self-interest first and you need to put our interests first".

"I think people would be horrified if the government changed leader again".

A new Fairfax Ipsos poll shows support for the coalition has plummeted following a week of bitter infighting within the government over energy policy.

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