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Turnbull intervenes in Liberal MP Craig Kelly's preselection fight

Turnbull intervenes in Liberal MP Craig Kelly's preselection fight

The PM described the rule change as "a historic decision" and said it was "the biggest change of how our party deals with these issues in 74 years".

"They're sick of it, it has to stop", he said.

Scott Morrison and Josh Frydenberg have changed the leadership rules of the Liberal Party.

"I am very concerned that this will put at risk the Berejiklian government".

Ministers are understood to have initially backed increasing the threshold to 75 per cent.

Labor changed party rules after Ms Gillard was toppled by Mr Rudd in 2013 to ensure leadership contenders must gain a majority of votes in the caucus and in a grassroots party ballot.

The ousting of Rudd, Julia Gillard, Tony Abbott and Malcolm Turnbull sparked a decade of leadership wars within both the major parties and led to claims the revolving door prime ministership has made Australia an worldwide joke.

Liberal senator Linda Reynolds said she called for a similar change the day after the August spill and her colleagues had been discussing options for months.

The former prime minister defended his intervention in an internal Liberal preselection process that could threaten the position of Mr Kelly.

In an unplanned meeting that caught many Liberal MPs off guard, Mr Morrison's colleagues agreed to make it harder to replace a sitting Liberal prime minister.

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"The only thing that is going to resolve this is going to the people and calling an election, to be honest".

"It would be manifestly in the best interests and prospects of the Morrison Government to go to the polls as soon as it can after the summer break", Mr Turnbull said.

Deep divisions within the party have been compounded by a disastrous Victorian election, the defection of former federal Liberal MP Julia Banks and the resignation of Victorian Liberal Party president Michael Kroger.

News Corp Australia can reveal MPs from all sides of the party are privately lashing out at Mr Turnbull with some calling for the former leader to be publicly repudiated or even expelled from the party if he continues to disrupt the Coalition government.

The peace deal comes after Mr Kelly effectively threatened to bring down the federal government by defecting to the crossbench.

Finance Minister Mathias Cormann has fired off a warning to any Labor MPs pencilling in a federal election win.

After surviving the test of his authority, Mr Morrison told Parliament that the Government was united in its fight against the ALP.

The prime minister said the party has listened to Australians frustrated about the coup that installed him in the top job.

Mr Kelly, a vocal conservative, was facing a preselection challenge from moderates in the federal seat of Hughes.

Morrison discussed the proposed change with former prime minister John Howard, but not with Malcolm Turnbull.