Malcolm Turnbull publicly ridiculed by members of his own party

Prime Minister Malcolm Turnbull has been publicly ridiculed by members of his own party for suggesting the Liberals are not run by factions.

In a sign there is still red-hot anger among many of the party faithful over Tony Abbott's removal, Mr Turnbull faced howls of laughter and derision during his speech to the NSW Liberal Party State Council in Sydney on Saturday.

After touching on trade and terrorism, Mr Turnbull turned to the topic of the Liberal Party itself.

"We are Australia's largest grassroots political organisation," he said. "The Labor Party, if it ever was a grassroots organisation, ceased to be a long time ago."

Malcolm Turnbull is expected to revive the animal spirits in the economy. Credit: Dallas Kilponen

He described the party as a broad church that drew on a wide variety of backgrounds and experience. But then things turned nasty.

"We are not run by factions," he said to instant guffaws of laughter.

A visibly uncomfortable prime minister handled the confrontation as best he could: "Well you may dispute that but I have to tell you, from experience, we are not run by factions," he said.

"Nor are we run by big business, or by deals in back rooms."

That comment also produced howls and disapproving scoffs from the crowd.

The hostile response was clearly directed at Mr Turnbull's dramatic ousting of Mr Abbott last month.

Mr Turnbull earlier sought to head off the hostility by heaping praise on his predecessor's record. But that clearly wasn't enough to satisfy the Abbott loyalists in the room.