A temporary, tenuous and deeply superficial silence has overcome the federal Liberal Party as it battles to retain the seat of Wentworth.

Even the most bitter and aggrieved MPs have made a conscious decision to stay silent in the face of voter backlash that threatens to rob the party of its one-seat majority in the make-or-break by-election of Wentworth.

The MPs know that speaking out while the by-election campaign is in its final stages, airing grievances or policy concerns at this time, will be viewed as wrecking and sabotage. No-one wants to be accused of destruction when the party is already on its knees after the removal of Malcolm Turnbull.

The great policy elephant in the room in that by-election is the yet-to-be-released religious freedoms review — and the subsequent legislation that Prime Minister Scott Morrison has promised to introduce to further protect and enshrine religious freedoms.

The review, set up after last year's same-sex marriage debate and headed by veteran Liberal MP Philip Ruddock, reportedly recommends formalising how religious schools are able to discriminate on the basis of sexual orientation, gender identity or relationship status.

The leaking of the review could not have come at a worse time for the Prime Minister.

The seat of Wentworth is small-l liberal, and the ideas reportedly canvassed in the Ruddock report provide rich pickings for independent and high-profile gay candidate Kerryn Phelps to exploit in a highly contested campaign.

Unfinished business

This religious freedoms debate is unfinished business for the conservatives in the Liberal and National party. Their loss in the same-sex marriage debate has mobilised their base and fired them up to fight for a greater set of rights.

Wentworth candidate Kerryn Phelps. ( News Video )

The risk for the Government is that this debate will now expose the deep and destructive divisions within the party.

On this issue, many moderates and libertarians are not prepared to go quietly and cop the changes.

Several MPs have spoken to me about their concerns but are unprepared to use their names before the Wentworth by-election is held.

One MP compared the passion Mr Morrison has for the religious freedoms debate and new laws with the fervour John Howard had over industrial relations, which saw him embark on the politically toxic WorkChoices legislation.

The Liberal MP said a prime minister must always be careful when legislating on the issue about which he is most passionate.

"He has a blind spot on this," the MP said about Mr Morrison.

A tinderbox near an election

This debate around a greater protection of religious rights is a tinderbox. It will escalate quickly after the Wentworth by-election because some MPs are concerned about not only the legal and rights implications — but of the electoral consequences of having this debate so close to the election.

The same people who fought for the yes vote on the same-sex marriage campaign are already preparing a ground campaign on this and it risks hurting the Liberal Party.

Former Liberal MP Philip Ruddock. ( ABC News: Nicholas Haggarty )

The leaked report recommends that the process for religious schools to turn away gay students should be made consistent across the country.

Schools would have to publicly outline their policy on the matter.

The measure would only affect students, as schools set up for religious purposes already have the right to take such matters into account when hiring staff or contractors.

Commonwealth, state and territory legislation presents a variety of provisions regarding discrimination based on sexual orientation and exemptions for religious schools.

The proposals would strengthen that regime — and it is on this point where the campaign will be fought.

The Ruddock-led panel delivered its findings to the Federal Government in May.

Review not considered by Cabinet

Mr Morrison would not comment on the specific recommendation in the Ruddock review, but said each proposal of the report would be considered "carefully and respectfully" before any final decision was made.

He stressed the review was yet to be released and had not yet been considered by Cabinet.

"It's a report that the Government will be considering and developing a balanced response to, and we will do that in our orderly process, taking it through Cabinet," he said.

"I want to make it clear that what was reported today is existing law."

But the bigger question is if it's all about enshrining what already exists in law, why is another bruising debate necessary?

This is the question many moderates are now asking.

Another senior Liberal MP told me that the debate would do immeasurable harm to the party electorally because voters had not decided there is a case for change.

"Voters are not storming into our offices demanding this as a national priority. It's a classic example of politicians confusing their own passions with the electorate's priorities," he said.

"It will further hurt our standing amongst women, particularly young women we are weak amongst, who tend to be more socially liberal."

But conservatives see it very differently and believe there is on the ground support for change in their electorates. They argue that this reform will reconnect them with their "base" and heal some of the wounds of the same-sex marriage campaign and subsequent legislation.

We are now potentially seven months out from a federal election. The Government has been marked down by the electorate following the ousting of Mr Turnbull.

If this issue isn't deftly handled by the Prime Minister he risks reopening wounds and exposing divisions once again.