An unhappy Liberal Party member is expected to challenge Treasurer Josh Frydenberg in the blue ribbon seat of Kooyong.
Oliver Yates is expected to announce his intention to stand as an independent as early as Tuesday, The Australian reports.
Mr Frydenberg holds the seat by a margin of 12.8 per cent.
A Liberal source told the paper that under party rules, the penalty for challenging an endorsed sitting member is automatic expulsion.
It comes as a number of independents challenge Tony Abbott for his seat of Warringah and rumours abound ex-Liberal Julia Banks could run against Health Minister Greg Hunt in the Victorian seat of Flinders.
