A senior Liberal insists “knives are not being sharpened” for leader Sussan Ley despite a messy dispute over immigration and the demotion of the Northern Territory senator Jacinta Nampijinpa Price.

Ley sought to calm the situation in Hobart on Thursday, apologising to Indian Australians and acknowledging Price’s inflammatory comments about Indian migrants had left them hurt and distressed.

She stopped short of predicting a return to the frontbench for Price.

“Jacinta is a valued member of our Liberal party team in our Liberal party room and I know [she] has contributed much in public policy and debate in this country, and will continue to do so,” Ley said.

Ley sacked Price from the shadow ministry on Wednesday night after the firebrand senator refused to express support for the Liberal party and opposition leader, or apologise for her remarks.

Price refused to apologise for suggesting the federal government was politicising the migration program to favour Indians and win votes for Labor, though she quickly walked the claim back, acknowledging Australia’s non-discriminatory migration policy.

There has been anger among Liberal MPs at the handling of the dispute, and open warfare has broken out between the party’s conservative forces and moderates aligned with Ley.

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The shadow home affairs minister, Andrew Hastie, said on Thursday there was no move afoot to undermine Ley’s leadership, insisting “knives are not being sharpened”.

“There isn’t a spill,” he told radio 2GB.

“What happened yesterday was Jacinta was asked three times whether she could support Sussan Ley, and she didn’t answer in the affirmative.

“And the rules of being a member of the shadow ministry is that you’ve got to support the leader.

“It didn’t have to get to this point,” he said. “But what is done is done, and it can’t be undone, and we’ve just got to move forward.”

Hastie, who has previously spoken of his ambitions to lead the Liberal party, could be a candidate if there was a move against the opposition leader.

“People know I have a desire to lead but there isn’t a move,” he said on Thursday.

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Backers of Ley’s other potential rival, the shadow defence minister, Angus Taylor, said the dispute this week was between Ley and Price, and not representative of leadership tensions.

Price was due to headline an event for members of the Australian Indian community in Perth on Thursday night, alongside the outspoken conservative Western Australian Liberal MLC Nick Goiran. The event was organised by state Liberal MPs, with the pair billed as “two MPs who are never afraid to say what needs to be said”.

The shadow finance minister, James Paterson, said on Thursday that he expected Price to return to a prominent role soon.

“It was self-evidently not an edifying week for the Liberal party and we are concerned about the way in which Indian Australians heard that discussion and felt about that,” he said.

“Political careers are not linear any more. They have fits and starts, forward steps and back steps, and I’m confident that Jacinta will be back in a prominent role in the frontbench.”

The shadow aged care minister and one of Ley’s key backers, Anne Ruston, said Price’s decision not express to confidence in Ley meant she had to go to the backbench.

“I can absolutely assure you the leader has the total support of her shadow ministry and she has the overwhelming support of our party room,” Ruston said.

“We need move on today and start focusing on the things that Australians want.”