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Costello adds fuel to ruling party spat

"The leadership of the party is ... determined by the views of the parliamentary party ... It is the clear will of the party that the current leadership arrangement continues."

John Howard, Australian prime minister

The No. 2 leader of Australia's ruling party indicated yesterday that he did not want to challenge Prime Minister John Howard, but that he had not ruled out that option.

National Treasurer Peter Costello signaled he wants Howard to agree to retire before the next election, due late next year, rather than challenge him for the Liberal Party leadership.

"My view is ... that political parties work best when they achieve smooth transition," Costello told reporters.

Costello was speaking to the media for the first time since accusing Howard on Monday of reneging on a 1994 deal to hand him the leadership of the Liberal Party within six years.

Howard has denied there was ever such a deal and accused his deputy of arrogance.

Howard and Costello, who have run the center-right government together for a decade, discussed the ruling party leadership on Tuesday; media analysts have speculated that their partnership has been irreparably damaged by the spat.

Costello said that Howard told him he was still considering whether to retire before the election.

"He intends to consider this matter, his future, and he'll let you know when he's done that," Costello said.

But the treasurer would not rule out eventually challenging for the leadership.

"I told you where things are now at, and we'll see how they work out," Costello said.

Howard later gave no clue about his retirement plans, and said he made no promises to Costello.

"There was a discussion yesterday, and I have indicated that the leadership of the party is something that is determined by the views of the parliamentary party, and that remains my position," Howard told reporters. "It is the clear will of the party that the current leadership arrangement continues."

Analysts agree that Costello, 49, does not yet have the support to mount a successful challenge against Howard, who turns 67 this month. Howard has led the coalition government to four election victories and increased its parliamentary majority at the last two polls.

One newspaper suggested the working relationship between Howard and Costello could not last.

"After effectively calling his leader a liar, it is hard to see how he [Costello] and Mr Howard can continue to work comfortably in the long term," the Australian newspaper said in an editorial yesterday.

The opposition Labor Party said the spat was proof that the government had become dangerously unstable. It called on Howard to reveal his intentions.

"We need from John Howard a clear-cut statement that he will serve out his time and contest the next election," Labor leader Kim Beazley told reporters in Melbourne. "The dithering is not good for the country."
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