Prime minister Scott Morrison’s personal approval rating has plunged 10 points in a fortnight and entered negative territory for the first time, the latest Newspoll shows.

The drop in Mr Morrison’s net approval from +7 to -3 follows a bruising sitting fortnight for the government. An historic electoral backlash in the Wentworth by-election saw independent Kerryn Phelps snatch one of Australia’s safest Liberal seats and end the Coalition’s one-seat majority in the House of Representatives.

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The prime minister is still well clear of opposition leader Bill Shorten, who sits on -13.

READ MORE PM resists push for NZ refugee deal after Labor, crossbench offer 'compromise'

But Labor continues its dominance in the two-party split and would win an election if it were held this weekend, with the gap widening slightly to 54 – 46.

Only around a third of voters wanted the government to call an early election this year, according to the News Corp poll – which fits well with Mr Morrison’s indications he intends to hold an election in April or May next year.

Meanwhile, the soon-to-be member for Wentworth, Kerryn Phelps, has accused the government of “offering false hope” in its byelection promises.

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Mr Morrison suggested he might accept New Zealand’s offer to settle up to 150 refugees from Australia’s offshore processing centres on Manus Island and Nauru, pending a deal on controversial “lifetime ban” legislation to prevent on-travel.

READ MORE 'You don’t negotiate your borders': Scott Morrison stands firm on Nauru

Labor and the crossbench offered a compromise last week, but Mr Morrison rejected the offer as a “horsetrade” on border security. In an exclusive sit-down with SBS News, Mr Morrison said he would not “negotiate” on borders.

“They were offering false hope,” Dr Phelps told the Fairfax press.

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“I think most people in Wentworth and Australia got the impression the government was going to accept the New Zealand offer and now it appears that this is not happening.”

A group of crossbenchers, including Dr Phelps, will soon move ahead with its own plan for a private members’ bill to bring around 50 remaining asylum seeker children on Nauru to Australia for medical treatment and assessment.

The Newspoll surveyed 1646 voters around the country between Thursday and Sunday, and has a margin of error 2.4 per cent.