Former Liberal MP Julia Banks has declared she believes Peter Dutton should refer himself to the High Court over the payment of Commonwealth subsidies to childcare centres owned by his family trust.

She has told Fairfax Media the Home Affairs minister had a “very clear” case to answer over his financial interest in the childcare centres.

“I think Peter Dutton should do the decent thing and refer himself to the High Court,” she said.

“I believe he has a higher duty to do the right thing.”

The Victorian MP, who announced her defection from the Liberal party on Tuesday, is now prepared to vote for Mr Dutton’s referral along with some of her crossbench colleagues.

The minority coalition government now holds just 74 of 150 lower house seats, and Labor could succeed in referring Mr Dutton if it secures votes from six out of the seven crossbenchers.

Defence Minister Christopher Pyne this week dismissed concerns about a potential referral for Mr Dutton and threatened there will be tit-for-tat if this happens.

Mr Dutton, whose leadership ambitions precipitated the events that led to former prime minister Malcolm Turnbull’s resignation, has a family financial interest in two Brisbane childcare centres which receive Commonwealth funding.

At issue is whether this makes him ineligible to sit in parliament under section 44 of the constitution which disqualifies anyone who has a “direct or indirect pecuniary interest” in any agreement with the Commonwealth.

At the height of the Liberal leadership crisis, Solicitor General Stephen Donaghue provided advice saying he could not categorically determine Mr Dutton’s status and only the High Court could decide.

Mr Dutton has dismissed questions over his eligibility, saying Mr Donaghue’s advice, and other “unequivocal” legal advice he has sought himself “puts to rest” any constitutional issues.

Ms Banks, who had criticised the leadership spill against Mr Dutton, said her views were not influenced by those events.

“I have to leave aside my personal feelings with regard to Peter Dutton and look at this objectively. And I’ve considered the legal advice very carefully,” she said.

-AAP