Peter Dutton’s plan to introduce powers to force large supermarkets to sell stores has prompted a fierce internal debate, with some Liberals arguing the plan represents a triumph of politics over principle.

Mr Dutton unveiled a plan for divestiture powers in the supermarket and hardware sectors yesterday, handing a win to Nationals leader David Littleproud, who had long agitated for the idea.

But the move angered several Liberal MPs, prompting what one MP told the ABC was the most heated partyroom debate under Mr Dutton’s leadership.

Alex Hawke, Maria Kovacic, Rowan Ramsey, Dave Sharma and Keith Wolahan all voiced concerns at the meeting. And several Liberal MPs told the ABC the move had taken them by surprise.

“It felt like an ambush,” said one.

Another suggested Mr Dutton had capitulated to the Nationals “at the expense of Liberal values”.

Walk slowly and carry a big stick

A key concern of the dissenters was that a divestiture regime would produce little tangible benefit but would lead to costly “lawfare” for supermarkets.

Under the plan, the ACCC would be able to take a supermarket or hardware store to court to force a sale. To be approved, the sale would need to meet tests of competitiveness, workforce impact and public interest.

Shadow Treasurer Angus Taylor said these tests, modelled on similar powers in the UK, the US and elsewhere, would ensure supermarkets did not simply offload failing stores or leave a community in the lurch if there was no viable buyer.

But Liberals opposed to the plan warned that competition law proceedings were notoriously complex and costly and typically involved rival parties making counter-claims about market conditions that would be difficult for courts to assess.

On that view, the policy would create “red tape” with little prospect of tangible benefit, a heavy-handed approach of the sort some Liberals think their party should reject.

But senior Liberal sources counter that the policy would work without needing to proceed to the courtroom, because the credible threat of a court battle would encourage supermarkets to “play ball” and consent to sale.

It is a similar argument Angus Taylor made in government as energy minister with the Coalition’s “big stick” approach to gas regulation.

Senior Liberals argue this would be especially effective in circumstances when a new competitor was trying to get a foothold but was being blocked by big incumbents “land banking” — buying up vacant land to obstruct them.

That is something Woolworths itself was on the receiving end of when its hardware chain Masters was land-banked out of business by Bunnings.

Who will buy this wonderful storefront?

But there is another question — will there be anyone to buy the stores?

Former Labor minister Craig Emerson doubted that, which prompted him to advise the government that divestiture would be a flop.

But there is optimism in the Coalition that the supermarket duopoly can be cracked, because the big players are not as efficient as they claim and could be vulnerable if a competitor gets a leg up.

They point to Aldi’s successful Australian debut and the fact the chain offers cheaper prices but remains popular with suppliers, as evidence there is room for improvement.

No divestiture for banks, airports… yet

It is part of a Liberal argument that supermarkets and hardware stores are exceptional cases and the only industries where divestiture is needed.

A senior Liberal source said that limited scope was key to the Liberal leadership’s willingness to get on board the idea.

The source rubbished the suggestion that Mr Dutton had capitulated to the Nationals or that Mr Taylor had been “rolled”, as Treasurer Jim Chalmers suggested in Question Time on Tuesday.

Mr Taylor has a longstanding interest in the idea, having written a university paper on UK prime minister Margaret Thatcher’s move to pursue divestiture for pubs.

There is also a view from Liberal MPs on both sides of the divestiture debate that big business had lost standing within the party because of their support for the Voice, which had softened the party’s “pro-business” default setting.

But their level of comfort would be shaken if the Nationals pushed to move beyond supermarkets into airlines or banks, both sectors its MPs have long had in their sights.

“We are very focused on small business, but that doesn’t mean we punish big businesses that are operating as they should,” one concerned Liberal said.

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