Australian Prime Minister Malcolm Turnbull's grip on power slipped further on Wednesday when he was forced to abandon his centerpiece tax policy and a conservative rival in his own party canvassed support for an imminent second challenge.

Turnbull's legislative agenda crumbled around him this week as he first watered down his main energy policy and then withdrew planned tax cuts for corporations, at the same time as he fought off a growing challenge from former home affairs minister Peter Dutton.

Dutton challenged Turnbull on Tuesday in a vote by the Liberal Party, the senior partner in the center-right government coalition, that likely marked the beginning of the end for Turnbull.