Australia will have a new Prime Minister after Scott Morrison was elected leader of the Liberal Party.

Morrison won the vote in the party room meeting 45 to 40 after days of tense meetings and panicked phone calls among party members as the country watched its government fall into disarray.

Morrison becomes the sixth Prime Minister in 11 years, and the fifth in five years.

A defeated Malcolm Turnbull stood down following a vote of no confidence in his ability to lead the party to the next election after he called the long-awaited meeting to finalise the challenge for the top job that started on Tuesday.

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Challenger Peter Dutton hoped he had the numbers to pull off the move he attempted to make earlier this week, earlier getting the 43 signatures he needed to force Turnbull to call the meeting.

But those who signed the document sent their votes elsewhere in the secret ballot, with many who put their name to the paper understood to be supporters of Turnbull's.

Earlier, Turnbull lost a spill motion 45-40 in the Liberal party room meeting he was forced to call after finally being handed the long-awaited petition Dutton needed to force him to step down.

Dutton personally delivered the document with 43 signatures from the majority of the party in his push to challenge Turnbull for the top job.

Bishop and Morrison spent the past 24 hours hitting the phones to get the support needed to pip Dutton at the finish line.

Morrison won the final vote.

Turnbull spent what was his last day full day in power drinking away his sorrows with a loyal supporter last night.

In an interview on KISS FM this morning, Liberal MP Craig Laundy revealed he spent the evening consoling a "shattered" Turnbull in the nation's capital.

"I was with him last night," Laundy said.

"We were having some glasses of red wine and champagne. He's shattered basically, I would say."

Meanwhile the Solicitor-General has released advice confirming Dutton's eligibility to sit in Parliament.

It stated it was unlikely Dutton would be disqualified however it was not possible to reach a definitive conclusion without more information.

Peter Dutton was convinced he had the numbers to roll Malcolm Turnbull.
Peter Dutton was convinced he had the numbers to roll Malcolm Turnbull.

Nasty swipes are circulating over the political "circus", with Tony Abbott's former chief of staff Peta Credlin labelling Julie Bishop "Turnbull in a skirt".

Credlin said Bishop had no chance of winning the leadership and she would not be the circuit-breaker the conservatives wanted.

"She is Malcolm Turnbull in a skirt," she told 2GB.

"It won't change the polls."

Dutton's petition reportedly has the 43 signatures needed to force Turnbull to call a party room meeting.

Queensland Liberal Warren Entsch indicated he would provide the 43rd signature if needed, with The Guardian now reporting he has done so.

It is understood Entsch has repeatedly refused to sign the petition, saying he will only add his name to break the deadlock.

Sky News is reporting the government whip has now received the petition and is taking it to Turnbull's office.

Dutton was photographed at dinner last night with Mathias Cormann - who resigned as Finance Minister yesterday after declaring the PM no longer had party support.