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The Telegraph report said Dutton was being urged to challenge Turnbull "on a policy platform of lower immigration levels and a new energy policy focusing on cheaper bills rather than lowering emissions".

Australian Prime Minister Malcolm Turnbull survived a leadership challenge by Home Affairs Minister Peter Dutton on Tuesday, government officials said, but the narrow margin of his win did little to dampen speculation about his future.

Now, in a stunning development, Liberal National Party Queensland president Gary Spence has urged the state's MPs to rebel against Mr Turnbull and install Mr Dutton as his replacement.

Asked whether he had spoken with Mr Dutton, the prime minister said his cabinet colleague was at the leadership group meeting on Monday morning and had attended cabinet last night.

Liberal members see Turnbull as "the best Labor leader the Liberals ever had", criticizing his push for same-sex marriage, his support for an Australian republic, and other causes favored by Labor and other left-wing parties. Turnbull ruled out any retribution against ministers suspected of supporting Dutton and said he had invited Dutton to remain in the senior security portfolio.

Whether a leadership change would be a good idea or not, Mr Atkins believed it could happen soon.

And it was a departure from his usual grim outlook as home affairs minister as he shook his fist at people smugglers and asylum seeker supporters.

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"I do think there is a danger for him", she said.

"Unity has to be created and loyalty has to be earned".

Australia's Prime Minister Malcolm Turnbull and German Chancellor Angela Merkel (not pictured) address the media following their talks in Berlin, Germany, April 23, 2018.

A defiant prime minister is holding onto his leadership with support from his two key lieutenants Treasurer Scott Morrison and Finance Minister Mathias Cormann.

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The party infighting over energy policy risks tipping the nation into a renewed period of political chaos and revolving door leadership that's seen Australia switch prime ministers five times since 2007.

Some political commentators believe that Dutton, buoyed by his strong showing, could challenge Turnbull again within days, especially if there is a mass exodus from the Cabinet. If other Ministers, Cabinet Ministers or junior ministers who voted for Peter Dutton this morning, should they follow him and resign?

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A stymied effort to cut corporate taxes, a citizenship crisis that cost a number of lawmakers their seats, and his perceived arrogance as the so-called "Mr. Harborside Mansion" of Sydney have all weighed on Turnbull's popularity with voters.

Earlier, Mr Turnbull mounted a counter argument and reminded fellow Liberals that voters would not be impressed by leadership shenanigans. "They can't just be demanded".

The fallout of his failed leadership challenge against Malcolm Turnbull was all anyone in Australia was talking about on Tuesday.

The government has trailed the centre-left opposition Labor Party in most opinion polls since the last election in 2016.

Despite his public silence, it is understood that Dutton on Friday privately told Turnbull that he was comfortable with the government's energy policy. "Hardline conservatives have just told electors in the starkest terms, "don't vote for this man, we know him, he is not one of us, not fit to lead".

After losing Dutton, a former police officer who ran a powerful department that oversees the country's domestic spy service, border force and national police, quit and moved to the backbench, broadcaster ABC reported. We don't take it for granted, but what I say to all those who didn't vote for the Prime Minister; we now have the opportunity to focus on what the electorate want to hear from us.

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