Political experts say Riverina MP and Deputy Prime Minister Michael McCormack is stuck between a "rock and hard place" over how to deal with the fallout from a sports grants scandal.
Nationals Senator Bridget McKenzie has been fighting off calls to resign as a cabinet minister after an Auditor-General's report found a "distribution bias" in favour of marginal electorates in her office's handling of the $100 million Commonwealth Sport Infrastructure grants fund.
University of Sydney senior politics lecturer Stewart Jackson said Mr McCormack faced risks to his own leadership position if he backed any move to sack Senator McKenzie. "It's a rock and a hard place. There's an almost overwhelming demand that she resign or be sacked," Dr Jackson said.
"But at the same time she is a leading woman in Parliament. The look will not be good; it allows more conservative elements like Barnaby Joyce to push forward within the National Party.
"It creates a lot of trouble for [Mr] McCormack."
When asked if he was confident that Senator McKenzie would continue to serve as a cabinet minister, Mr McCormack said he "did not want to pre-empt anything that the Secretary of Prime Minister and Cabinet is looking into by making any statements as to what might or might not happen following his report".
"The secretary needs clear air to look at all the information which is going to be put before him and let him make a determination based on that evidence and report back to [the Prime Minister]," he said.
Mr Morrison started the investigation following claims that Wangaratta Clay Target Club received a $36,000 grant after Senator McKenzie was gifted a club membership.
Former Riverina MP Kay Hull said she would not to comment prior top the investigation but had confidence in Senator McKenzie.
Charles Sturt University political science associate professor Dominic O'Sullivan said Senator McKenzie's survival so far supported claims about her level of party support.
"It suggests at least so far that [constituents] haven't been raising the issue to MPs in sufficient numbers and with sufficient concern," he said.
Mr McCormack said the Nationals would support his decision on Senator McKenzie.
"People in Australia, particularly regional Australians, do not want us to be looking inwardly," he said.
"They want us to do the job in which we were elected and that is to take their fight to Canberra to improve their lives and the local communities where they live, particularly as we help communities recover from the bushfires and continue to address the ongoing drought.
"That is what we are doing. The Nationals support all decisions made in the best interest of the party and the people we represent."
Mr McCormack said any group in the Riverina electorate that applied for funding could be "certain their applications have been assessed on merit and using the guidelines and regulations pertaining to each grant program".