Malcolm Turnbull has been told he has lost the support of the Liberal party room and should step down as Prime Minister.

Key points: The Government adjourns the House of Representatives five hours early

The Government adjourns the House of Representatives five hours early Senior Liberals say they believe Peter Dutton has enough support to become leader

Senior Liberals say they believe Peter Dutton has enough support to become leader But Treasurer Scott Morrison is now also planning to stand for the Liberal leadership

The crisis has deepened ever further with the Government adjourning the House of Representatives.

"Shame, Shame" was shouted from the Labor side as the vote result was announced and the lower house rose five hours early.

The Government's one-seat majority was again tested with crossbenchers Rebekha Sharkie and Cathy McGowan refusing to back the early adjournment of parliament.

Despite that, the adjournment motion passed 70 to 68.

Labor leader Bill Shorten denounced the move saying Australia no longer had a functioning Government.

"It is not the Parliament that has failed, it is the Turnbull Liberal Government that has failed," Mr Shorten told the chamber.

"This is the ultimate admission of surrender."

Cormann switches sides, 'ScoMo' enters the fray

Mitch Fifield, Mathias Cormann and Michaelia Cash leave a press conference after announcing they have withdrawn support for Malcolm Turnbull. ( ABC News: Matthew Abbott. )

The shock move to shut down Parliament came after senior Liberals said they believed Peter Dutton had enough support to become leader with Victorian Greg Hunt as his deputy.

But Treasurer Scott Morrison is also planning to stand for the Liberal leadership now that it is clear Mr Turnbull no longer has enough support to remain PM.

Senate leader Mathias Cormann and fellow Cabinet ministers Mitch Fifield and Michaelia Cash have told Mr Turnbull he should go, and all have resigned.

Mr Turnbull's Ministry dissolved this morning, with frontbenchers including Mr Hunt, Trade Minister Steve Ciobo, Human Services Minister Michael Keenan, Cyber Security Minister Angus Taylor and Alan Tudge all insisting their resignations be accepted.

Mr Turnbull's strongest backers, including Foreign Minister Julie Bishop, Education Minister Simon Birmingham, Defence Minister Marise Payne and Defence Industry Minister Christopher Pyne are staying firmly with him.

They are expected to throw their support behind Mr Morrison in a challenge.

Senator Cormann, a key Liberal powerbroker, said he believed Mr Dutton was the best person to lead the country to the next election.

"It is with great sadness and a heavy heart that we went to see the PM yesterday afternoon to advise him that in our judgement, he no longer enjoyed the majority of support of Liberal members," he said.

Senators Cormann, Fifield and Cash said a majority of their party room colleagues believed there should be a leadership change.

Mr Turnbull called a snap leadership ballot on Tuesday and won by 48 votes to 35.

Mr Dutton's supporters were enthused by that result and have pushed hard ever since for another vote.

On Wednesday, Mr Cormann (left) stood by Malcolm Turnbull and Treasurer Scott Morrison (right) and declared his support. ( ABC: Matt Roberts )

Senator Cormann said more Liberal MPs had told him since Tuesday that they had switched their support to Mr Dutton from Mr Turnbull.

"We cannot allow this situation to continue," Senator Fifield said.

Mr Turnbull has not yet said how he will respond to the apparent collapse in his support.

Failed bid to send Dutton to High Court

Sorry, this video has expired House of Representatives votes not to refer Peter Dutton to the High Court

With Mr Dutton appearing set to become Prime Minister, Labor unsuccessfully tried to refer him to the High Court over his eligibility to sit in Parliament.

The vote to send Mr Dutton to the High Court failed by the narrowest possible margin, 68 for and 69 against.

Mr Turnbull voted with the rest of the Coalition against sending Mr Dutton to the High Court.

Mr Dutton's register of members interests shows he is the beneficiary of a family trust with interests in childcare centres in Queensland.

Those centres, like many around the nation receive Commonwealth Government subsidies.

Sorry, this video has expired Peter Dutton requests second leadership spill. Picture: Matthew Abbott

Labor has legal advice that could put Mr Dutton in breach of section 44 of the constitution.

Yesterday Attorney-General Christian Porter asked the Solicitor-General for advice.

But Mr Dutton said he had received "unequivocal legal advice" in 2017 that he was eligible.

He was told in December last year that, while he may be the beneficiary of the trust, there was some distance between any Mr Dutton and any money because his wife was the director of the company.

The advice also said the subsidies received were applied to all eligible childcare centres and there was no direct "agreement" with the Commonwealth for this particular case.

Mr Dutton labelled claims to the contrary part of "a spurious and baseless campaign" against him.

"The timing on the eve of current events in Australian politics is curious," a statement read.