Find more news and analysis on yesterday's leadership vote here.New Opposition Leader Tony Abbott has vowed to heal his fractured Liberal Party and wants to fight an election on the climate change issue.
Mr Abbott won the leadership from Malcolm Turnbull by the slimmest of margins yesterday 42 votes to 41 the shaky victory signalling a shift to the right for the party buckling under internal pressure to reject the Government's emissions trading scheme.
The third leadership contender, and presumed front-runner, Joe Hockey, fell at the first hurdle, winning only 23 votes against 26 to Mr Turnbull and 35 to Mr Abbott.
Mr Abbott's first act was to ditch the Opposition's $7 billion deal to pass the ETS and some Opposition senators are now being lobbied to break ranks to support the Rudd Government's ETS.
The Government will be handed the trigger to call a double-dissolution election if the Senate blocks Bills to establish an ETS, the cause of Liberal Party infighting and its former leader's demise because he supported the scheme. The Senate adjourned late last night just short of finally voting on the ETS.
Mr Abbott signalled his intention to take on Prime Minister Kevin Rudd over climate change.
''I really am not frightened of an election on this issue because as far as many, many millions of Australians are concerned, what the Rudd Government ETS looks like is a great big tax,'' he said.
''I know my colleagues are gearing up for the fight of their lives.''
Under his stewardship, the Liberals would rigorously hold the Government to account and be ''an alternative, not an echo''.
But perhaps hoping to soften his hard man image, Mr Abbott who has trained as a boxer and as a priest acknowledged yesterday that ''climate change is real and I think that man does make a contribution''. Previously the father-of-three had said climate change was ''absolute crap''.
Mr Turnbull said he was moving to the back bench and considering his future but did not rule out another tilt at the leadership.
He was ''disappointed that there's not only been a change in leadership but there's been a pretty dramatic change in policy''.
The Government warned the ''extremists'' had taken over Liberals and launched last night its first attack advertisement, arguing ''Mr Abbott's extreme views will take Australia backwards; backwards on climate change and back to WorkChoices''.
Assistant Climate Change Minister Greg Combet appealed for Liberal senators ''of good conscience'' to support the ETS.
Mr Abbott would not speculate on whether all Liberal senators would block the Bills if required. But warned it would be ''grossly irresponsible'' for the Opposition to wave this scheme through the Parliament.
Mr Hockey's shock elimination came after he said party members would be able to have a free vote on the ETS under his leadership.
''There's always a surprise in these ballots and I had one today,'' he said after the meeting.
''It's not my time.''
In the second round of the party room vote, there was one informal vote a member wrote ''no'' on the ballot paper and touted Turnbull supporter Fran Bailey missed the meeting for health reasons.
Deputy Opposition Leader Julie Bishop, who voted for Mr Turnbull, will remain in her position.
With minutes of securing the leadership, Mr Abbott called an unusual secret ballot on the ETS.
The motion carried by 54 votes to 29 proposed the Bills should be scrutinised by a Senate committee. If this was rejected, the Opposition would vote against the Bills.
Mr Rudd, in Washington for talks with US President Barack Obama, urged parliamentarians to vote for the Bill. ''It's time, instead, we voted in support of this bipartisan Carbon Pollution Reduction Scheme, because to do so votes to act,'' he said.
Mr Turnbull believed the emissions trading scheme was ''worthy of support'' after the Opposition had secured changes that would protect jobs.
''A major political party must have a credible policy on climate change ...'' Mr Turnbull said.
Liberal backbencher Judi Moylan paid tribute to the former leader.
''In the face of some of the worst treachery I have ever witnessed in the 17 years that I have been in parliament, Malcolm Turnbull stood firm for the policy position we took to the last election. This is the kind of robust leadership our party and our community needs at this time,'' Ms Moylan said.
Liberal Senator Judith Troeth was disappointed with the result and thanked Mr Turnbull for his service.
Mr Abbott conceded there were some wounds that needed healing.
''I said to my colleagues that I will do my best to be a consultative and collegial leader,'' he said.
Mr Abbott saw the selection of a new front bench as an important opportunity to help the healing process and display the Liberal Party was a broad church.
''I do feel humbled and daunted by what's ahead but I also feel proud and exhilarated at the prospect of leading this great political party into the next election,'' he said.
The self-described ideological love child of John Howard and fellow conservative Bronwyn Bishop, Mr Abbott received a glowing endorsement from the former prime minister.
Mr Howard said Mr Abbott was highly intelligent, energetic and had a broad understanding of policy in social and economic areas.
''He will take the fight to Kevin Rudd and the Australian Labor Party,'' according to Mr Howard who stressed ''there is no such thing as an unwinnable election, any more than there is such a thing as an unlosable election''.