UPDATED: Scott Morrison has been chosen by the Liberal party room as Australia's 30th Prime Minister.
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Mr Morrison defeated Peter Dutton 45 votes to 40 in the secret ballot.
Julie Bishop was eliminated in the ballot’s first round.
Josh Frydenberg, previously the Energy and Environment Minister, has been elected deputy Liberal leader.
Mr Frydenberg will take over from Ms Bishop who had served as deputy Liberal leader under Malcolm Turnbull and Tony Abbott.
The first task for Mr Morrison will be to sort out a functional cabinet.
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EARLIER: The Liberal leadership crisis has morphed from a battle between Malcolm Turnbull and Peter Dutton into a rare three-cornered contest, with Treasurer Scott Morrison and Foreign Minister Julie Bishop preparing to put their names forward when an expected spill motion is carried at a party room meeting at noon.
A key step before the ballot is the disclosure of advice from the Solicitor-General on whether Mr Dutton has a case to answer on his eligibility to sit in Parliament, a constitutional question that has fuelled talk of dirty tricks against the former home affairs minister.
