Nervous Liberal MPs have begun discussing alternative leadership options, and the pros and cons of switching to either Foreign Minister Julie Bishop or former leader Malcolm Turnbull are now being "actively" considered.

Fairfax Media has been told worried backbench MPs have been phoning each other in a state of agitation over the government's continuing woes.

The development is a dangerous one for Prime Minister Tony Abbott and comes as Cabinet figures closed ranks around him on Thursday in the wake of the Australia Day "knightmare" fiasco in which an Australian knighthood was awarded to Prince Philip, the Queen's husband.

Finance Minister Mathias Cormann said it was time to move on, as it was clear Mr Abbott had learnt from the error.

"The Prime Minister's taken responsibility for the decision he's made, he's learnt his lesson, he's indicated that he will consult more widely in the future, I think that's a good thing, I think it's now time to move on and to actually focus on the important issues for Australia," he told Sky News.

The party-room chatter, which is not universal, could nonetheless widen when parliament resumes and become the pre-cursor to a repeat of Labor's convulsive removal of sitting prime minister Kevin Rudd in 2010.

However, it has been played down by other Liberal insiders who insist the mood is one of disappointment rather than insurrection. Another described a feeling of hopelessness, but dismissed talk of a possible change as exaggeration.

However multiple sources have said that consideration of radical corrective action, including a possible leadership change within months, is under way.

They said Mr Abbott faced several critical tests in coming weeks, the first being a landmark address to the National Press Club on Monday - his first as Prime Minister - in which he is expected to lay down the big policy markers for 2015, including, possibly, some elements of a wide-ranging family assistance package.

MPs say the speech will be closely watched amid expectations that he will put forward a positive reform agenda to the nation, designed to reboot what has been a horror start to the year.

But critics warn he also must be careful, and say he cannot announce new policy initiatives during the speech which have not been put to the party-room because Coalition MPs will not tolerate another so-called "captain's pick".

The timing of the Press Club speech is also tricky as it will follow closely on the heels of the state election result in Queensland, where the Newman Liberal National Party government is struggling to limit significant losses.

Queensland LNP members have tried to insulate the state poll from the federal government's problems throughout the snap election campaign period: Mr Abbott himself was pointedly not invited to make an appearance.

But Mr Abbott's absence from the Sunshine state is not expected to fully insulate him from blame if the LNP vote drops dramatically.

A febrile mood among Coalition MPs could make for a difficult first party-room meeting of the year when parliament resumes on February 9.

With the "knightmare" controversy dragging on, Mr Abbott is resisting internal and external pressure to sack his chief of staff Peta Credlin, whom some conservatives blame for a string of political errors dragging the government's popularity down.

After News Corporation boss Rupert Murdoch weighed in on Wednesday to call for her head, Liberals sprang to her defence with some crediting her with steering the Coalition to office in 2013.

At least one member of Mr Abbott's partyroom blamed innercity types for the knighthood debacle.

NSW Nationals MP Michael McCormack said it had left most voters "scratching their heads".

He said Mr Abbott should visit a pub in his NSW electorate for an "honest appraisal" of his work.

Liberal backbencher Ken Wyatt called for his colleagues to keep "cool heads" and wait until Parliament resumed when the Prime Minister would have his first opportunity to address his team since announcing the Australia Day honour for the Duke of Edinburgh.

"Let's keep cool heads and listen to what the leader has to say and not be too judgmental until what we know all the detail," he said.

"Let's wait until we get back to the party room, until then we're players in a team and we support the leader."

Ms Bishop is understood to have dined recently at Mr Turnbull's Sydney house, in a sign that the pair's relationship remains close.

With Latika Bourke

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