As the in-fighting continues, Abbott is spending most of his time in his office, "pondering national security [and] Islamic State and reading Winston Churchill", according to the Australian.
The Liberal Party's "most serious current dilemma", Higginson wrote in two emails to the federal executive last weekend, was the Credlin/Loughnane "conflict of interest", which he blamed for "the sheer vitriol, and pent-up animosities, and enmities" in the party.
The leak follows a rare interview with Credlin, who told the Australian she would not resign, because "it would send the wrong signal", implying "she had done something wrong".
The paper said Abbott would not sack her, out of loyalty, his "exaggerated gallantry towards women" and a belief "that he cannot run the country without her".
Instead, "Abbott and Credlin will survive or crash together ... It's like a bizarre political death pact".
Credlin's pervasive influence and "controlling" management style have made her deeply unpopular with ministers and backbenchers.
According to the Australian, she and Foreign Minister Julie Bishop "despise each other".
Her departure and that of Treasurer Joe Hockey - considered a liability because of the backlash against last year's Budget - were the main demands of rebel backbenchers who instigated a motion calling for a leadership ballot, which was supported by 39 Liberals.
The Australian, which ran a two-day special report on Liberal Party malaise and the Abbott-Credlin relationship, described the pair as "in reality, co-prime ministers".
It claimed she answers questions for the Prime Minister, finishes his sentences and once "put her hand in front of his face to stop him replying to a question".
"She decides who he sees, what the agenda is, who is appointed to run the offices of Cabinet ministers, the order of Cabinet business," according to the paper, which quoted a minister's staffer as saying that "she even chooses his ties ... She likes blue".
One reason Credlin "tries to keep him [Abbott] on a tight leash", claims the Australian, is that he is not good at thinking on his feet.
That was demonstrated when he told a conference in Melbourne last year that Australia was "unsettled or scarcely settled" when British colonists arrived.
New questions have been raised about Abbott's competency and judgment after a leaked report that he canvassed the idea of Australia unilaterally invading Iraq last November to combat Isis' growing military might.
The Prime Minister has dismissed that as "purely fanciful".
Last week, he dismayed colleagues when he reminded Indonesia about the A$1 billion which Australia gave to tsunami-devastated Aceh province, saying it would feel "grievously let down" if the executions of two Australian drug smugglers went ahead.
Backbencher dissatisfaction has also been fuelled by Abbott's sacking of Chief Whip Philip Ruddock, a Liberal stalwart and father of the House of Representatives.
There are fears that the Liberals' woes could affect the NSW state election next month, despite the popularity of Premier Mike Baird.
