The crisis engulfing the Coalition has deepened with Queensland senator Matt Canavan declaring he will challenge David Littleproud for the Nationals leadership at a party room meeting on Monday.

The declaration from Canavan — who says he is seeking the position to rebuild from last Saturday’s “catastrophic loss” — comes a day after Jacinta Nampijinpa Price shocked colleagues with her defection from the Nationals to Liberals.

Nationals are furious that their Liberal colleagues engineered the defection, with Senator Bridget McKenzie warning there would be payback.

Senator Price’s move has also put noses out of joint among the Liberals, with multiple moderate faction sources saying it was a slap in the face to the women in the party that leadership contender Angus Taylor and his backers couldn’t find someone “acceptable” among those already in the tent.

“Taylor has sought to import a National who’s never been a member of the Liberal Party room to be its deputy leader . . . it’s ineptitude on an epic scale,” one Liberal said.

Another source said some moderates had been leaning towards backing Mr Taylor but his enthusiastic support of Senator Price’s defection had done him more harm than good.

Ms Ley said it was clear that Australians expected a change in direction from the Liberal Party.

“We need to build a new economic narrative. We need new policy offerings that show Australians we can help them and their families get ahead,” she said in a statement.

“We need to listen and we need to change. The Liberal Party must respect modern Australia, reflect modern Australia and represent modern Australia.”

She also emphasised the need to develop policies using the “robust party room processes” after Peter Dutton’s leadership came under fire for running a closed-shop policy process.

Ms Ley’s side was seen at Parliament on Friday studying the Hewson-era Fightback policy manifesto.

Mr Taylor’s pitch was around unifying the party and a “deep renewal” to modernise the organisation from the ground up.

“We need real ideas that match the scale of the challenges we face. From housing and energy to the cost-of-living and national defence. We need to show the country that we’re serious about aspiration, opportunity, and backing Australians to get ahead,” he said.

“I will provide leadership that unites our party, that puts our cause above sectional interests and that reaches beyond our base and earns the trust of the voters that we’ve lost.”

Fellow senior frontbencher Dan Tehan ruled himself out of contention, pledging to “work hard and serve in whatever capacity I am asked to rebuild our party”.

Sources within the party said the numbers were a movable feast and very close between each of the contenders.

Some moderates such as senior frontbencher Jane Hume and returning MP Tim Wilson have been reluctant to back either side.

Linda Reynolds — who is still a senator until the end of June — has declared she will back Ms Ley, although most of the WA Liberal contingent is in Mr Taylor’s camp.

One WA Liberal source said it would be very difficult for them to bring Ms Ley to the State given her history opposing live exports and her role in launching the review that Labor is using to back its overhaul of environmental laws.

“Angus is realistic, he knows that he will not be the next prime minister,” the same source said, while talking him up as being able to play the “elder statesman” and pave the way for a new generation of Liberal leaders.

On Friday, Senator Canavan cited the plight of the WA sheep industry amid the ban on live exports as part of his reasoning for challenging Mr Littleproud.

He said the people he was most disappointed for were those the party had let down.

“Particularly front and centre of my mind, we let down the West Australian graziers, sheep graziers (and) they face now the ending of their industry,” he said.

He said the party had “hid out light under a bushel” during the past term of Parliament but the tactic had “catastrophically failed”.

“I reject the notion that somehow the Nationals Party should ever feel that it needs to be muzzled or muted to help the broader cause,” he said.