Home Affairs Minister Peter Dutton may be ineligible to sit in Parliament due to his family's financial interests in the Commonwealth, according to an explosive report that has added a dangerous new dimension to the leadership speculation gripping the Turnbull government.

Network 10 on Monday night reported Mr Dutton could be in breach of the constitution, which rules ineligible anyone who "has any direct or indirect pecuniary interest in any agreement with the Public Service of the Commonwealth".

The allegation comes amid fevered speculation Mr Dutton is considering a leadership challenge to Prime Minister Malcolm Turnbull, and the report will trigger a frenzy of finger-pointing as to the origin of the story.

Peter Dutton in Question Time on Monday. Credit:Alex Ellinghausen

Fairfax Media understands Network 10 had been researching the story for weeks. Journalist Hugh Riminton affirmed on Twitter that the story was "not a leak".