Bridget McKenzie is resisting calls to quit the front bench, despite reports the PM has “had enough” and discussed her exit over a dinner of Turkish pizza at The Lodge with two cabinet colleagues, Nationals leader Michael McCormack and Treasurer Josh Frydenberg.

Prime Minister Scott Morrison offered an entirely lukewarm defence of the embattled deputy Nationals leader on Thursday, vowing he would take “whatever action is necessary” if a report finds Senator McKenzie has breached ministerial guidelines over the sports rorts affair.

Asked if he would demand her resignation if the former sports minister was found to have breached the standards, or whether he would be in a position to do so given she was a Nationals MP, Mr Morrison noted that the referral was done with Mr McCormack’s agreement.

“I’m not going to prejudice the outcome of that report, I think that would be unfair to that process and to the secretary, I’ll let him do his job, and then I will look at that advice and take what ever action is necessary,” the Prime Minister said.

“I took the auditor-general’s report very seriously. We are acting on recommendations of that report as to how it reflected onto the statement of ministerial guidelines, and a very different set of matters, which were reported on yesterday, which was new information.

“It was important they were referred, I will await that advice.”

#BREAKING: Bridget McKenzie is expected to resign from the frontbench by Friday afternoon, reports Sky News Political Editor @aclennell. https://t.co/q2C3A8DRB6

— Sky News Australia (@SkyNewsAust) January 23, 2020

The Auditor-General found Senator McKenzie ignored Sport Australia’s advice on which organisations should be awarded $100 million in grants before the federal election in May 2019, with 73 per cent going to projects not recommended by the agency.

Senator McKenzie, who is now Agriculture Minister, came under increasing pressure on Wednesday after revelations she gave $36,000 to a Victorian shooting club of which she is a member.

Her office insisted on Thursday she would not resign, despite reports on Sky News she will quit by Friday.

“The Minister isn’t resigning. She is actively engaging in the process and is confident there hasn’t been breach in ministerial standards,” a spokesman said.

At last night’s dinner the PM and Treasurer told the DPM McKenzie has to go, but McCormack said that he’s worried about how that might open the door to Barnaby Joyce coming back onto the frontbench. What a mess….and this btw doesn’t even speak to the wrongdoings 🙄🤷‍♂️

— Peter van Onselen (@vanOnselenP) January 23, 2020

Earlier, Labor leader Anthony Albanese said the scandal was a disgrace.

“This abuse is rank. It stinks more than a bucket of prawn heads that you left out on a hot day like today. The stench goes all the way up to the government,” he said.

This is a rort. Bridget McKenzie must resign – and if she won’t, Scott Morrison must sack her. https://t.co/OwK9pVGpfX

— Anthony Albanese (@AlboMP) January 21, 2020

Mr Morrison’s lukewarm defence was in contrast to Home Affairs Minister Peter Dutton, who insisted the government was not going to sack ministers based on the mob rule of social media.

“We’re not hanging people out to dry, we’re not listening to the Twitter crazies,” he said.

“We are looking at the facts. If we jumped at opportunities to stand people down when I don’t think the case has been made, I think frankly we are giving up to the noisiest person on Twitter, and I don’t agree with that.

-with AAP