A three way contest for leadership of the deeply divided Liberal party is likely in Canberra this morning.

Malcolm Turnbull has declared that he will defend his position.  Joe Hockey says he will stand, if there is a spill of present positions.

But he has named a price.  That is a free vote for all Liberals, on the climate change bills that are now before the Senate. That would be the first free vote for the party since the Republic debate , a decade ago.

If the party agrees, the bills could well pass Parliament.

Tony Abbott had been saying that he would not stand, if Joe Hockey did.

However, Mr Abbott changed his stance, late yesterday, declaring that he would be a candidate after all, even if Mr Hockey stands.

So  Mr Abbott, effectively, will be the candidate of the climate change deniers, who rebelled against Mr Turnbull’s leadership.

The stakes in this battle are very high.

Ian Macfarlane, who negotiated the a climate change deal with the Federal government, declared in a television interview last night, that the Liberal party could not be a credible force in Australian politics, without a policy to tackle threats associated with climate change.

The former Liberal leader in the Senate, Nick Minchin, has led the campaign against the government’s proposed emissions trading scheme.

Senator Minchin, who is known by some of his colleagues as “the dark prince,” has declared that neither he, nor his friends in parliament, believe that human activity is producing global warming.

The Senate debated the government’s ETS bills, over an extended period, yesterday.

But it was still far from a final vote, late last night.

Liberal party MPs met, informally, throughout the day.

It was still unclear late last night, though, which of the three candidates will win today’s ballot.

The haggling, though, did raise at least some hope, on the government side, that the bills would pass parliament, after all.

If they are rejected, or blocked, for a second time, though, the Prime Minister, Kevin Rudd, could order a double dissolution – and take the nation to an early election that the Coalition would, almost certainly, lose.