The Gillard government's support on the floor of the House of Representatives has been further eroded by Speaker Peter Slipper's announcement he will stand aside while police decide whether to investigate fraud allegations against him.
Mr Slipper, who quit the Liberal Party last year to take the speaker's chair with Labor backing, has denied misusing Cabcharge vouchers and sexually harassing adviser James Ashby.
He returned from overseas with a Parliamentary delegation yesterday and announced he would stand aside as Speaker to allow the Cabcharge allegations to be investigated.
The government and Mr Slipper hope he will be cleared over the allegations before Parliament sits again for the budget session next month.
Mr Slipper said the allegations levelled at him by Mr Ashby included a claim of criminal behaviour and a claim under civil law.
''Any allegation of criminal behaviour is grave and should be dealt with in a manner that shows appropriate regard to the integrity of our democratic institutions and to precedent,'' Mr Slipper said.
''As such, I believe it is appropriate for me to stand aside as Speaker while this criminal allegation is resolved.
''The allegation is incorrect, and once it is clear they are untrue, I shall return to the speakership. I would appreciate the relevant bodies dealing with the matter expeditiously.''
An Australian Federal Police spokeswoman said: ''We are aware of allegations of fraud and we will be taking action to assess this information.''
If the Cabcharge matter has not been resolved before Parliament resumes, Mr Slipper's deputy, Labor MP Anna Burke, will take the chair.
This would force Labor to rely on Ms Burke's casting vote from the chair if independent Andrew Wilkie refused to back the government in a confidence motion.
Mr Wilkie withdrew his support for the government after it reneged on elements of a poker machine reform agreement.
Mr Slipper stood aside from the speakership after the Opposition threatened to move against him when Parliament resumed.
Under section 35 of the Constitution, the Speaker can be removed by a vote of the House.
In a brief statement, Prime Minister Julia Gillard said Mr Slipper had done the right thing by standing aside.
''It is appropriate that Mr Slipper has stood aside as Speaker whilst alleged criminal conduct is investigated,'' Ms Gillard said.
''It is also appropriate for all parties to note the processes under way and treat them with respect.''
Opposition Leader Tony Abbott said the government's support for Mr Slipper had raised questions about Ms Gillard's integrity.
''Yet again, members of the Labor Party, members of the Australian public would be questioning the standards and the integrity of this Prime Minister,'' Mr Abbott said.
''This is a Prime Minister who has consistently shown that the only standard that counts for her is what will protect her embattled government, what will shore up her numbers in a very shaky and fragile parliament.''
Greens Leader Christine Milne said the allegations levelled against Mr Slipper were serious but he must be afforded the presumption of innocence. ''These are serious allegations and they need to be treated appropriately,'' Senator Milne said. ''At the same time, the presumption of innocence must be respected.''
Mr Ashby has alleged in Federal Court documents that Mr Slipper made unwanted sexual advances towards him and sent him explicit text messages.