Nationals deputy leader Bridget McKenzie is digging in amid intense political pressure to quit over a sporting
Prime Minister Scott Morrison has vowed to take whatever action is necessary after the head of his department investigates if ministerial standards have been broken.
Senator McKenzie is under fire for her actions as sports minister following a damning auditor-general's report.
Minister for Agriculture Bridget McKenzie and Prime Minister Scott Morrison speak to the media last week. Source: AAP
It found a $100 million grants program favoured marginal and targeted seats, with the minister ignoring 73 per cent of Sport Australia's recommendations before the last election.
Mr Morrison has referred the issue to Department of Prime Minister and Cabinet secretary Philip Gaetjens to see if ministerial standards were breached.
"I'm not going to prejudice the outcome of that report, I think that would be unfair to that process and to the secretary," he told reporters in Canberra on Thursday.
"I'll let him do his job and then I will look at that advice and take whatever action is necessary."
Senator McKenzie's spokeswoman says the minister is not resigning.
"She is actively engaging in the process and is confident there has not been a breach in ministerial standards."
Mr Gaetjens' investigation will also look into a $36,000 grant given to a shooting club of which Senator McKenzie is a member.
The minister did not disclose her membership on her register of interests, with her office arguing that was unnecessary because it was a gift worth less than $300.
Prime Minister Scott Morrison has so far stood by the embattled deputy Nationals leader. Source: AAP
Mr Morrison said the shooting club issue was "very, very different" to the broader controversy surrounding the grants scheme.
The deepening scandal has cast doubt on Senator McKenzie's deputy leadership.
Nationals leader Michael McCormack questioned why Senator McKenzie should resign.
"I'm sticking by Bridget. We've had long discussions about what's taken place," he told The Australian.
"Why should she step down? Let's let the reviews that have been called for take their natural course. Everybody's innocent until proven otherwise."
Nationals MP Keith Pitt refused to buy into speculation Barnaby Joyce could seek a return to a leadership role if the axe falls on Senator McKenzie.
Minister for Agriculture Bridget McKenzie in the Senate chamber at Parliament House. Source: AAP
"We currently have a leadership team in place. There is no vacancy to nominate for," he told Sky News.
"There's not much point in getting caught up in hypotheticals."
Labor's shadow special minister of state Don Farrell has written to Mr Gaetjens warning him against conducting a "sham" investigation to serve the government's political interests.
"The Australian community is quite rightly outraged at this appalling use of public funding for political - and personal - gain," he wrote.
