A dispute about the Liberal Party's finances has caused a split in Tony Abbott's inner circle, with the party's federal treasurer threatening to resign over transparency issues and alleged conflicts of interest involving the Prime Minister's chief of staff, Peta Credlin, and her husband, federal director Brian Loughnane.

In two extraordinary emails sent to members of the federal Liberal Party executive over the weekend, federal treasurer Phil Higginson wrote of being "overwhelmed by the sheer vitriol" within the party at present and his unease at seeing his "good friend" Mr Abbott being "brought down this way".

Prime Minister Tony Abbott's chief of staff, Peta Credlin, in the House of Representatives. Credit:Alex Ellinghausen

Mr Higginson explained in one email that he had only in the past week signed off on the party's 2013/14 accounts because of a "significant delay in obtaining the information I sought" from Mr Loughnane and the party's secretariat about expenditure.

In an email likely to be as devastating as former Liberal director Shane Stone's infamous "mean and tricky" memo in 2001 about the Howard government, Mr Higginson wrote that the "most serious current dilemma" facing the party was conflict of interest between the political and organisational wings because of Mr Loughnane and Ms Credlin's marriage.