And in an embarrassing leak from Monday night's cabinet meeting, Fairfax Media has been told cabinet had a lengthy discussion about the co-payment. Immigration Minister Peter Dutton. Credit:Andrew Meares Mr Abbott's criticism of Mr Dutton came towards the end of the meeting as he summed up the debate, although he did not directly name the minister. A cabinet minister who was part of the discussion told Fairfax Media there was no doubt in his mind Mr Abbott's comments were, in part, a criticism of the former health minister. The cabinet minister told Fairfax the Prime Minister had said: "This issue has been mishandled, it has been mishandled until now."

"Congratulations to Sussan for settling them [the medical community] down." Health Minister Sussan Ley has flagged changes to the PBS in the May budget. Credit:Andrew Meares But during question time on Tuesday, Mr Abbott appeared to place at least some of the blame for the failure to deliver the policy on himself as he declared the co-payment was now "dead, buried and cremated". Asked if his comments to the cabinet had been referring to this own performance, that of the government or just Mr Dutton, Mr Abbott did not deny he had made the statement to cabinet. The Prime Minister said that as a former health minister "I should have known better than to attempt health reform without the strong co-operation and support of the medical profession".

"I should have known better. Because Madam Speaker, what I well and truly learnt in my four years as a health minister was if you want to bring about effective health reform in this country it is best done, in fact, often it is only done with the broad support of the medical profession," he said. This issue has been mishandled, it has been mishandled until now "I accept chastisement, Madam Speaker. Particularly given my experience as health minister but it is much better to learn than to be obstinate." "We have learnt and that's why we are determined to improve the Medicare system, we are determined to make a great system better and we are going to do so in the closest possible cooperation with the medical profession and the other great health professions of our country." Mr Dutton was moved into the immigration portfolio by Mr Abbott in December's frontbench reshuffle.

The leak from cabinet is a clear sign that tensions continue to simmer in the Abbott government, even as the Prime Minister attempts to recover his government's fortunes with a series of major policy announcements. In addition to dumping the co-payment, the government has announced more troops will be sent to Iraq and on Thursday the government will release the long-awaited intergenerational report. The leak comes despite a revival in the government's standing in Monday's Fairfax Ipsos poll. A spokesman for Mr Abbott has denied the Prime Minister rebuked Mr Dutton, saying the story is inaccurate. Formally announcing the backdown on Tuesday, Ms Ley said the government had listened to the concerns of health professionals, patients and MPs.

"We recognise that we cannot introduce reforms to build a strong, sustainable Medicare without the support of the public and the Parliament," she told reporters. "It is clear the proposal for a co-payment and associated $5 cut to the rebate do not have broad support and will not proceed." But she said the government would push ahead with a freeze on indexation of Medicare rebates until 2018, "while we work with the profession to develop future policies". She declined to say whether the freeze would be lifted at some point in the future. Ms Ley insisted the "policy intent" behind the co-payment "was and remains a good one." "It's definitely good policy to put the right price signals in health to make sure that people value the service they get from doctors," she said.

"With more than seven out of 10 consultations for non-concessional patients being bulk-billed, we have to recognise that that level of government support for patients who can make a modest contribution of their own is not in the long term acceptable." She said she did not have a particular savings target in mind, and ruled out raising the level of the Medicare levy as "a lazy option". Loading She said she remained "100 per cent committed" to the Medical Research Future Fund, which would be established with other health savings. Follow us on Twitter