Australia PM Malcolm Turnbull clinging on amid fresh leadership challenge threat

Australian PM rejects Cabinet resignations as new challenge looms

Peter Dutton, then Australia's minister for home affairs, speaks at Parliament on August 20 in Canberra.

Mr Turnbull won the party-room vote 48-35 but the narrow margin of the victory made another challenge nearly certain in a country that has earned a reputation for a revolving door of political leaders, with six prime ministers since 2009.

"I can not underline too much how important it is that anyone who seeks to be prime minister of Australia is eligible to be a member of Parliament", Mr Turnbull said.

Senator Seselja, who formally resigned his position as assistant minister for science, jobs and innovation on Thursday, said he would again support Mr Dutton, but refused to say Mr Turnbull was out of touch.

He says he will stand down if a majority of Liberal Party MPs sign a letter to bring on an internal vote.

"What we have witnessed at the moment is a very deliberate effort to pull the Liberal Party further to the right", Turnbull told reporters.

Not a single leader in recent times has succeeded in serving a full three-year term as prime minister.

"My decision to move to the crossbench is not about Dutton or Turnbull, it is a matter of principle". But they failed to get the minimum 43 signatures that were required.

Dutton has released legal advice that his family's ownership of two child-care centers that received federal funding does not breach a constitutional ban on lawmakers having a pecuniary interest in an agreement with the public service.

Ms Bishop is calling all her Liberal party colleagues directly to make her pitch to become Australia's next prime minister.

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"The government may adjourn the parliament, but they can not outrun the weight of failure of this government", he said.

Along with Mr. Dutton's resignation, he also let go the International Development Minister Concetta Fierravanti-Wells.

Media reports said other lawmakers were considering running for Turnbull's job, including Treasurer Scott Morrison.

Solicitor-General Stephen Donoghue QC provided the advice about whether Mr Dutton was eligibile to sit in parliament over his financial interests in Commonwealth-funded childcare centres.

As the Liberal leadership crisis unfolded in Canberra, a special Snap SMS Morgan Poll of more than 2000 voters showed Ms Bishop (64 per cent) ahead of Mr Shorten (36 per cent).

This comes after Australia's House of Representatives has been adjourned by the government amid a battle over the Liberal leadership, with Bill Shorten arguing the coalition is "irreparably split" and should hang their heads in shame.

In a frantic Thursday morning, Australia's opposition parties lost a parliament vote that would have forced a court to determine whether Dutton is eligible for the premiership.

He is yet to publicly respond to the latest threat to his rule, although broadcaster ABC reported that he turned down the demand for another party meeting during the phone call.

Donaghue said Dutton's case was impossible to predict because the facts are "unlike those that have previously been assessed" by the high court and there is "significant division" on the court about section 44 (v).

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