* Australian prime minister clings to leadership
* Nine cabinet ministers voted against prime minister
* Prime minister expected to face renewed leadership challenge
By Colin Packham
CANBERRA, Aug 22 (Reuters) - Australian Prime Minister Malcolm Turnbull has rejected the resignations of seven cabinet members despite them backing a rival for leadership, the country's foreign minister said on Wednesday, as Turnbull seeks to quell the threat of a renewed leadership challenge.
The Prime Minister on Tuesday survived a leadership bid from Peter Dutton, then Australia's Minister for Home Affairs, in a party room vote. the small margin of victory, narrowed by nine cabinet ministers backing Dutton, has stoked expectations that Turnbull will face another challenge in the near future.
Desperate to unite the fractured ruling party, Turnbull has asked the bulk of the cabinet rebels, including Australia's Trade Minister Steven Ciobo and Greg Hunt, minister for health to remain in their posts, Minister for Foreign Affairs, Julie Bishop said.
"A number of people who voted for Peter Dutton have in fact offered their resignations to the prime minister, they've done the right thing, but the prime minister has said that he wants them to remain in the ministry," Bishop told Australian Broadcasting Corporation radio.
Bishop said Dutton and Concetta Fierravanti-Wells, former Minister for International Development and the Pacific, have had their resignations accepted.
Turnbull on Tuesday said he asked Dutton to remain his cabinet position but Dutton declined, a move widely seen as a precursor for another challenge as he works to secure the seven votes within the Liberal Party he needs to become the Australia's sixth prime minister since 2009.
Although Dutton has refused to outline whether he intends to challenge Turnbull, the conservative lawmaker on Wednesday began to outline his policy agenda should he succeed in a renewed bid.
"We pay some of the highest prices in the world for electricity and fuel. I think these are the kind of things we should be working on and if we do, I believe people will strongly support the government," Dutton told Triple M Radio.
Dutton's comments suggest that further political instability will continue to afflict the government in the final two days of parliament's sitting before it breaks until September.
Turnbull came to power in a party-room coup in September 2015 when he ousted former premier Tony Abbott who also survived an internal leadership contest before his eventual defeat.
A social liberal and multi-millionaire former merchant banker, Turnbull rode an early wave of popular support but his standing has diminished significantly.
He has struggled to appeal to conservative voters, while progressive supporters have been disappointed as they watched government policies shift to the right as Turnbull tried to appease a powerful right-leaning backbench.
The uneasy unity held sufficiently to secure a narrow election victory in 2016.
However, that fragile peace was broken this week by the weakening of the government's centrepiece energy policy, which had included the imposition of a target of a 26 percent reduction in greenhouse emissions from Australia's energy generators, an issue that has repeatedly divided the government.