Innes Willox from the Australian Industry Group, which represents mid-to-large companies, said the majority of its members supported the Turnbull government's energy policy in an effort to end the climate wars.

Mr Willox is fuming the prime minister capitulated to rebels in his ranks and performed an about-face on the plans.

"This is an issue that has been absolutely destructive, not just for politics in Australia, but also for businesses," he told ABC radio on Tuesday.

"It's really sapped confidence now for almost a decade."

Mr Willox says the NEG wasn't perfect but would have provided a clear framework for investment.

"We're back at a point where businesses are wondering what's next," he said.

"We've lived with uncertainty for a decade, how much longer do we need to live with it?"

Facing a serious threat to his leadership, Mr Turnbull has shelved the NEG, promising instead to cap power prices and break up large energy companies who wield too much power.

Mr Willox points out the competition watchdog never recommended either course of action.

"They're not going to deal with the symptoms of rising energy prices that we've seen and that's the real concern out of all this," he said.

Energy Minister Josh Frydenberg claims the changes were well very received, saying Australian seniors and the Chamber of Commerce and Industry "clapped their hands and welcomed our announcement".

"What we were doing is taking on the big energy companies," Mr Frydenberg told the ABC.

Liberal MP Kevin Andrews believes changes to the government's signature energy policy marks the end of the NEG - at least for now.

"The NEG, at least for this term of parliament, is dead in the water," he told Sky News.

Treasurer Scott Morrison insists the NEG "not at all dead", with states now able to go ahead with the reliability measures.

"The government's policy remains exactly as we've presented it and with some further improvements," he said.

Liberal Party MPs will hold a regular meeting on Tuesday morning, at which vocal backbencher Craig Kelly expects to be more formally briefed on the latest version of the energy plan.

For now, Mr Kelly suggested he was confused about what exactly the plan includes.

"Whichever NEG it is, there's still opposition from a considerable number of backbenchers," he said.

Prime Minister Malcolm Turnbull cited a lack of Labor support as one his reasons for shelving the energy policy.

But shadow treasurer Chris Bowen said that was a complete furphy.

"We made clear that while we had concerns we were prepared to be constructive," he told ABC radio.

"It wasn't about the Labor party at all. The fact of the matter is he (Mr Turnbull) was rolled by the right wing of his party."

Mr Willox urged the government not to walk away from its Paris climate agreements altogether - as some backbenchers want to see happen - believing it would almost certainly lead to trade sanctions against Australia.

Australian Associated Press