With key cabinet ministers resigning and his government voting to adjourn the house of representatives early, Malcolm Turnbull says he will hold another party room meeting - but at midday tomorrow.
He says he will not contest any second leadership challenge.
“When the party room meeting is called, I will invite a spill motion to be moved,” he said.
“If the motion is carried, I will treat that as a vote of no confidence and I will not stand as a candidate in the ballot.”
If that happens, he says he will stand down from parliament altogether.
Mr Turnbull also used Thursday's press conference to cast serious doubt over former Immigration and Home Affairs Minister Peter Dutton’s ability to lead a stable government, requesting the Solicitor-General advise of his eligibility before tomorrow's meeting.
“This issue of eligibility is critically important. You can imagine the consequences of having a prime minister whose actions and decisions are questionable because of the issue of eligibility,” he said.
Showing some fight, Mr Turnbull criticised rebel MPs within his party for staging an ‘internal insurgency'.
“I’ve never given into bullies,” he said.
“They’re hard to stop. What we have witnessed at the moment is a very deliberate effort to pull the Liberal Party further to the right.”
The press conference followed the adjournment of the house of representatives before question time on Thursday.
Leader of the House Christopher Pyne put forward a motion to adjourn the parliament. It won by a narrow vote of 70-68.
The result saw Labor yell abuse across the chamber to the government, with Manager of Opposition Business Tony Burke saying the government has ‘fallen apart'.
“This place has fallen apart so completely that they are dissolving the parliament for the day entirely,” he said.
“No government in living memory has said, "It's all too hard. We're just going home."
Opposition Leader Bill Shorten said the country no longer has a functioning government.
“To adjourn the Parliament would be an admission that parliament has failed. It is not the parliament that has failed. It is the Turnbull Liberal government in this country which has failed.”
The house of representatives will now be adjourned until 10 September. The senate remains sitting.
Key ministers abandon Turnbull
Mr Turnbull had just a brief reprieve after winning Tuesday's challenge by Mr Dutton by 13 votes.
On Thursday morning, three key ministers - Mathias Cormann, Michaelia Cash and Mitch Fifield - announced the prime minister no longer had their support, in a move that all but marks the end of his leadership.
They met with the prime minister and offered their resignations from cabinet, urging a party room meeting be called before the end of the parliamentary sitting week.
"The reason we came to that view is because of the number of colleagues who came forward, who supported Malcolm in the leadership ballot on Tuesday who indicated to us that they had changed their position," Senator Cormann said.
The change should see the numbers delivered for Peter Dutton to take over as Liberal leader in a leadership challenge expected later on Thursday.
However, there are reports Treasurer Scott Morrison might also put his hat in the ring to run against Mr Dutton for the leadership.
Earlier on Thursday, Mr Dutton spoke to the prime minister to request a second party room meeting to be held to vote on the Liberal leadership.
The former Home Affairs Minister said he believes he now has the numbers to beat Mr Turnbull, and it is understood Health Minister Greg Hunt will run alongside him as Deputy Leader.
The resignations leave just Indigenous Affairs Minister Nigel Scullion and Education Minister Simon Birmingham on the Senate frontbench, making Senator Scullion the Coalition’s current leader in the senate.
Further resignations include Greg Hunt, Steve Ciobo, Alan Tudge, Michael Keenan and Angus Taylor all tendering their notice. As well as James McGrath, Michael Sukkar and Zed Seselja.
A Labor motion to refer Mr Dutton to the High Court over claims he may be ineligible to sit in parliament was voted down in the House of Representatives, 68-69, on Thursday.
Speaking to media, Senator Cormann said it was was with "great sadness and a heavy heart" that the three advised the prime minister yesterday afternoon that he no longer had the support of the majority of the party room and offered to resign from cabinet.
"I did not want to be in this position," he told reporters in Canberra.
"But I can't ignore reality."
Senator Cash also offered her resignation.
"I have been with and supported the prime minister through the entirety of his time in that office, up to and including Tuesday," she said.
"But what has become apparent is that a majority of party room colleagues believed that there should be a transition."
Senator Fifield said he also supported the Malcolm Turnbull in Tuesday's ballot against former Immigration and Home Affairs Minister Peter Dutton. But by Wednesday it was clear Mr Turnbull no longer had the confidence of the party room.
"I became aware yesterday that it was very clear that the prime minister no longer, in my opinion, had the confidence of the party room," he said.