Cabinet ministers rejected a $1.6 billion plan to cut power bills for thousands of Australians in the days before a Liberal Party brawl on energy policy that helped bring down Malcolm Turnbull.

Fairfax Media can reveal the Coalition government had drafted plans for a one-off bonus to help pensioners and others in financial stress pay their electricity bills, in a bid to demonstrate stronger action on power prices alongside tougher consumer laws.

Mr Turnbull put the plan to federal cabinet in early August at the same time he was trying to shore up support for the National Energy Guarantee against threats from Tony Abbott and others to cross the floor.

In a crucial decision, cabinet members rejected the plan to lower power bills and left the government without new measures to address household energy costs in the face of the backbench revolt over the NEG.

The outcome is now the subject of dispute within the government over the handling of such a key issue before the bitter leadership spill, as Prime Minister Scott Morrison tries to remove policy “barnacles” in areas ranging from the retirement age to company tax cuts.