The Coalition is debating the details of the Finkel Review - a report from Australia's Chief Scientist that recommends new clean energy targets.
Labor and the Greens say they're ready to negotiate - but conservatives within the Prime Minister's own party are sceptical.
The Coalition party room met for three hours last night to debate their response to the Finkel Review.
Leaks to the media suggest around 30 MPs spoke, with many critical of the recommended clean energy targets.
They were led by former prime minister Tony Abbott, who has described the plan as an effective tax on coal.
Outside parliament today, Liberal MPs like Jane Prentice were keen to characterise the meeting as a civilised debate.
"Everybody has strong views and that's the great thing about our party that we can all express our views robustly, and we're still great mates at the end of the day."
Nationals MP Mark Coulton says he's angry so many details about the internal party meeting were leaked to the media.
But he says he was among those who criticised the idea of clean energy targets.
He's worried that investing too heavily in renewables will jeopardise the price and reliability of power.
"We're an island a long way from anywhere, we don't have the option of when our renewables don't work, bringing a cable in from somewhere else to bring in our baseload power. We are responsible for supplying our baseload power in a mix with our renewables."
One MP reportedly told Fairfax Media after the meeting that Malcolm Turnbull's leadership could be under threat, unless he listens to the backbench.
In 2009, Mr Turnbull lost the Liberal leadership to Tony Abbott after he decided to support the Labor party's carbon pricing scheme.
But several cabinet ministers have rubbished the leadership speculation.
Treasurer Scott Morrison says it's nothing but a rumour.
"Those sorts of assertions are better placed for (celebrity magazine) "New Idea" than they are, I think, for reporting of news. What we're focused on is getting an outcome for the Australian people. We're working through that process I think in a very responsible and methodical way."
Labor is seizing on the internal division, with MP Wayne Swan claiming it is evidence of widespread climate change denial in the government's ranks.
"Tony Abbott was a wrecker then, and he's a wrecker now. The tragedy however is that he's now joined by up to half of the party room, who can't face up to the basic scientific facts presented by the chief scientist, and are now in revolt about a policy which is absolutely essential for our strong economic growth into the future."
Mr Turnbull says the government is determined to get its energy policy right, and will carefully consider Dr Finkel's recommendations.
A bipartisan solution is still a possibility, with Labor and the Greens prepared to strike a deal.
But the Opposition has warned the Government not to attempt to define any kind of coal - including so-called 'clean coal' - as clean energy.
Mr Coulton, the Nationals M-P, argued Australian coal was more pure than that in other countries.
But Labor leader Bill Shorten says the definition of 'clean energy' should be limited to renewables.
"Coal is part of our current energy mix and it will be in the future. But if we going to have a discussion about clean energy, the proposition that that includes all forms of coal - well, that's just a con."
