Brendan Nelson abandoned his plans for a hardline approach to climate change policy yesterday when he was rolled comprehensively by his shadow cabinet.
In the biggest setback yet to Dr Nelson's leadership, the shadow ministry overwhelmingly backed Malcolm Turnbull and other senior Liberals, such as Julie Bishop and Greg Hunt, who were urging the Coalition to stick to its election policy.
After three weeks of pushing to change the policy - to doing nothing until all the big polluters such as China, India and the US had committed to action - Dr Nelson fell into line and reverted to a position similar to the original Coalition policy for an emissions trading scheme by 2012.
The scale of the scheme would depend on what, if any, action the big polluters had committed to undertake by 2012.
Dr Nelson said if they refused to make any commitment at next year's international climate change conference in Copenhagen, "Australia should commence an emissions trading scheme with a very, very low carbon price and a very, very low trajectory".
"It will mean we will have the [emissions trading] infrastructure in place whilst not potentially sending Australian jobs offshore," he said.
Labor has a similar policy, with the key difference that it wants to start in 2010.
The Coalition believes this is too early but in another concession Dr Nelson said he was prepared to negotiate with the Prime Minister, Kevin Rudd: "If he has a convincing argument, well, we would like to hear it."
Dr Nelson's backdown will buy him trouble at today's policy meeting of all Coalition senators and MPs.
His shift in recent weeks had emboldened climate change sceptics and other hardliners on the backbench and they were backing a policy of doing nothing.
"He will meet some resistance in the party room," warned one angry MP.
Sources said Dr Nelson and other hardliners such as Nick Minchin did not put up a fight in shadow cabinet and no-one supported him. Dr Nelson allowed everyone to have a say and when the majority view was apparent, he accepted it.
"This has been three weeks of horror for us and what have we got? Back to where we started?" one senior Liberal said later.
Australia's biggest businesses and corporations were also lobbying hard against any change.
The heads of Woodside Petroleum, BHP Billiton, Rio Tinto and the Business Council were among those to directly lobby senior West Australian Liberals, including Ms Bishop and Chris Ellison. The corporate giants supported the original Coalition policy.
They wanted the Opposition to stay engaged in the debate so Labor's policy, with which they have some concerns, could be fine-tuned and not subject to negotiations with the Greens.
They opposed Dr Nelson's push for a do-nothing policy because it would deny them certainty when making plans for multibillion-dollar investments.
"They were comfortable with the agreement they had negotiated with Howard," said one Liberal.
"It gave them certainty, time to adapt, and was not too extreme."
This was put to Dr Nelson in yesterday's meeting.
It was also pointed out that all private and public polling showed most voters wanted the Government to act and not wait for big polluters.
The Liberal backbencher Mal Washer, the chairman of the Coalition climate change committee, opposed any shift, calling it "stupid".
He was backed by his deputy, Senator Simon Birmingham.
But a meeting yesterday of the 40-member committee was evenly split over the policy shift.
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