Liberal MP Ann Sudmalis will quit politics at the next election, blaming "branch-stacking, undermining and leaks", in a major blow to Prime Minister Scott Morrison's efforts to increase the number of women on his team.

Key points: Insiders say without Ann Sudmalis contesting NSW seat of Gilmore, the chances the Coalition will retain it are diminished

Insiders say without Ann Sudmalis contesting NSW seat of Gilmore, the chances the Coalition will retain it are diminished Her announcement will also further reduce the number of women in Liberal Party ranks

Her announcement will also further reduce the number of women in Liberal Party ranks She says she has been placed in an impossible situation, and the final straw came when she lost her campaign team

Ms Sudmalis, who holds the New South Wales seat of Gilmore by less than 1 per cent, said she had no choice but to pull out of the race for preselection, and informed Mr Morrison of her decision during a meeting this morning.

Liberal insiders say her withdrawal severely diminishes the chances of the party holding the seat, making the Coalition's ability to hold government all the more difficult.

Speaking exclusively to the ABC and Fairfax Media, Ms Sudmalis struck out at her enemies inside the Liberal Party.

"There is a very strong element that my branches have been stacked," she said.

"You can't ever confirm just exactly who is responsible for that but I have my suspicions."

When reports first emerged that she would be stepping down over the weekend, Ms Sudmalis told the ABC it was "rubbish".

But she has now revealed her decision has been a long time coming.

"I've been contending with undermining and leaks at the local level for five-and-a-half years and it's been a slow, steady, aggravating, annoying process," she said.

In a statement, Ms Sudmalis went even further.

"My decision has been made in the face of NSW Liberal Party bullying, intimidation, leaking and undermining at a local level," she said.

Party insiders say Ms Sudmalis has a "toxic relationship" with New South Wales Liberal MP and party powerbroker Gareth Ward, and believe he has been behind the campaign to unseat her.

She makes reference to an unnamed "local self-determined senior Liberal" who she claims has been "leaking damaging material to the media and holding publicity stunts" that are "unfair and unethical".

But in a statement, Mr Ward said he had "enjoyed" working with Ms Sudmalis on local projects.

"I wish her and her family all the best for their retirement and look forward to working with her successor," he said.

Sudmalis says PM was disappointed to find out

Ms Sudmalis said she wrote to Mr Morrison last week telling him she wanted to withdraw her nomination, but that he refused to open the letter until yesterday.

"When he did open it, he was pretty disappointed," she said.

"We're mates and he wanted to have me as part of his team but my position is impossible now."

The Liberal MP said the final straw came when she lost her campaign team the weekend after the change in Liberal leadership.

"My fundraising committee, my campaign committee, my friends were all outvoted at the AGM," she said.

"It means my core group of people who've been my support for six years have been replaced."

Ms Sudmalis was facing a preselection challenge from local real estate agent Grant Schulz and while she believed she could still win, she said she simply "can't work with the team that's there currently".

"It's just ludicrous that these people have been put in this position," she said.

Mr Morrison has praised Ms Sudmalis as an "outstanding member" and promised to take her concerns seriously by setting up a "rigorous and confidential process" to deal with the complaints.

"Ann raised a number of genuine concerns with me regarding her treatment within the New South Wales division of the Liberal Party," he said.

"This is in addition to complaints I have received from other colleagues about processes in the party's organisational wing."

The Minister for Woman, Kelly O'Dwyer, welcomed his decision to have an investigation into the complaints and said it must be independent.

"The party organisation needs to have a complaints process in place that is rigorous and confidential," Ms O'Dwyer said.

"And being rigorous, it needs to be independent."

Sudmalis joins raft of Liberal women walking out

Ms Sudmalis's announcement will not only affect the Coalition's chances at the next election, it will also further reduce the number of women in Liberal Party ranks.

Victorian MP Julia Banks is not recontesting the next election, Queensland MP Jane Prentice lost preselection, South Australian senator Lucy Gichuhi has been relegated to an unwinnable spot on the state's ticket and there is an expectation former foreign minister Julie Bishop may also be stepping down from her blue ribbon seat in Perth.

Liberal MPs Julia Banks and Julie Bishop have been sitting together on the backbench since Ms Bishop stood down from the Cabinet. ( ABC News: Nick Haggarty )

Mr Morrison and former prime minister Malcolm Turnbull had both intervened to try and save Ms Sudmalis's political career but could not convince her to stay.

But Ms Sudmalis said her decision was a "vote of confidence" in Mr Morrison.

"I want to make sure this is not, absolutely not about Scott," she said.

"I truly believe that he's a prime minister who can ultimately bring our party together."

Mr Morrison stood beside Ms Sudmalis in May, embraced her in front of TV cameras and enthusiastically endorsed her as the "right candidate" in Gilmore.

At that same press conference, Ms Sudmalis declared she was doing a "damn good job" and told her preselectors there was no reason to "change the jockey on the horse".