CANBERRA - Australian politics remains in chaos with the futures of Opposition leader Malcolm Turnbull and the Government's greenhouse emissions trading scheme hanging by slim threads.

If Turnbull falls and rebel Liberals block the ETS, Prime Minister Kevin Rudd could dissolve both houses of Parliament and call an early election that would likely hammer a divided and flailing Opposition.

The Senate, already running a day into its Christmas break, failed to meet Government demands to vote on the ETS legislation yesterday and will return on Monday to continue a bitterly divisive debate.

Government senators accused the Opposition of reneging on its deal to support amended ETS legislation, and said "whackos" and "climate change deniers" had taken control of the Liberal Party.

"It is deeply, deeply disappointing," said Deputy Prime Minister Julia Gillard.

But Opposition senators said the Government had no reason to demand such short debate on such a complex and far-reaching scheme, and said it was scared of allowing a full discussion.

Behind angry scenes in the Senate yesterday was Turnbull's increasingly parlous position, now appearing all but untenable with the defection of 13 members of the shadow cabinet, including some of its most senior and influential figures.

Key among them was frontbencher Tony Abbott, a minister in the former conservative government of John Howard, and until this week a Turnbull supporter in a battle that is tearing the Liberals apart.

Abbott has warned Turnbull to back down from his demand to pass the ETS legislation and instead follow party policy of deferring a vote until after next month's climate change summit in Copenhagen.

Abbott has called for another leadership spill and has said he is prepared to challenge the sorely wounded Turnbull.

But the position has been confused by reports that another powerful Turnbull supporter, Shadow Treasurer Joe Hockey, is about to switch sides and may try for the leadership if a spill - in which the leadership is declared vacant - is called on Monday.

Hockey, who yesterday continued to affirm his support for Turnbull, would then be faced with the same Catch 22 facing Turnbull: continue pushing for an immediate ETS vote with the gulf now dividing the party, or engineer a delaying vote that would start his leadership with a dangerous backflip.

As Opposition MPs prepared for a torrid weekend of strife and a showdown on Monday, Rudd was on his way to a Commonwealth leaders' meeting and climate change talks next week with United States President Barak Obama.

Rudd wants the ETS settled so he can arrive in Copenhagen as a "friend of the chair" with credentials to demonstrate Australia's leading role in emissions control.

He had reached an agreement with Turnbull in which he agreed to key Opposition demands - including an extra A$7 billion ($8.9 billion) in aid for heavy emitters and the exclusion of agriculture - in return for passage of the legislation.

But open rebellion within the Liberals, and outright rejection of the ETS by senators of the junior Coalition partner, the Nationals, now seriously threaten the deal.

Greens, Family First and independent senators also want more time and hold serious doubts about the merits of the scheme.

This week Turnbull stared down rebel MPs at a joint party room meeting - at which a majority of Liberals supported the deal - and later defeated a bid to spill him from the leadership to allow a challenge.

But late on Thursday Abbot and Senate Liberal leader Nick Minchin met Turnbull and warned him if he did not change his position he would be challenged.

Turnbull remained defiant, claiming that he had stamped his authority on the leadership at this week's meetings, and that he had sufficient numbers in the Senate to ensure the passage of the ETS even with defections.

He needs seven Liberals to carry the vote.

Warning that if the legislation did not pass, Rudd would dissolve Parliament and call an early election in which the Opposition would be "wiped out", Turnbull said yesterday the rebels were threatening the party's political credibility and integrity.

"This is not a game," he told ABC radio.

"We are talking about the future of our children and of their children, we're talking about the future of the planet, we're talking about whether the Liberal Party wants to be a credible, progressive political movement of the 21st century."

But rebel MPs, citing an avalanche of emails and telephone callers from voters opposed to the ETS, are determined that if need be they will bulldoze Turnbull into history to prevent its passage.

"Malcolm has known for some time that the course of action which he has ultimately decided upon would in my view have had very difficult consequences for our unity," Abbott told reporters.

Government ministers were furious, with Assistant Climate Change Minister Greg Combet saying refusal to pass the ETS yesterday could prove only one conclusion. "That is that the extremists, the conspiracy theorists and the climate change sceptics in the Liberal Party have gained ground and are winning this argument."

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