Pesce relented and told Kelly he could not stomach the thought of shaking his hand. "You're a disgrace for what you're doing to the party," Pesce told Kelly. "You're the disgrace," Kelly shot back. Gymnastics coach Graham Spooner intervened and told the men to cool it. So did Evans. Liberal MP Craig Kelly lost his cool on Sunday night after a messy day fighting to save his career. Credit:Andrew Meares Kelly confirmed the encounter when contacted by Fairfax Media on Sunday night but declined to comment. Pesce refused to talk but Evans confirmed the exchange: "This is not how you behave in public," he said of Kelly.

The incident capped off another bad day for Kelly and the Liberal Party, which is riven by bad blood and infighting ahead of a federal election next year. Loading Just a few hours earlier Kelly thought a deal had been done to save him from losing a preselection challenge by local councillor Kent Johns for his safe southern Sydney seat of Hughes. A preselection defeat would be a disaster for Prime Minister Scott Morrison, who needs to keep Kelly's conservative faction happy and do whatever it takes to keep the unpredictable backbencher from shifting to the crossbench. A plan was hatched over the weekend to fix it all. Morrison's powerbrokers decided the best way to handle a tough preselection fight was to cancel the preselection altogether. The NSW Liberal Party's 23-member state executive would be asked to use its emergency powers to automatically endorse all sitting MPs, including Kelly.

The proposal initially received the support of some members of the moderate faction, who loathe Kelly for his role in the demise of Malcolm Turnbull but were prepared to suck it up for Morrison and party unity. But as the day went on the backlash grew. Several moderate state executive members resisted enormous pressure from some of the most senior figures in the Morrison government to get on board and save Kelly. By 5pm it was clear the plan to cancel preselections would never get through the state executive. Kelly would likely have to face preselection after all - a reality that hit just before he strode into the Engadine Gymnastics Club. An intervention by Malcolm Turnbull proved crucial. Turnbull hit the roof when he found out about the peace proposal and telephoned state executive members, including Matt Kean, a minister in Gladys Berejiklian's government, to urge them to vote against it. Turnbull couldn't believe Kelly and his conservative allies were backing a plan to suspend preselections when they'd campaigned so hard over recent years for reforms to give grassroots members more power in selecting candidates.