Tensions as Howard admits Costello wants his job

John Howard

Australian Treasurer Peter Costello yesterday spelled out his ambition to replace Prime Minister John Howard before the next election in a tense meeting between the two men.

Afterwards, Mr Howard conceded that the Treasurer clearly wanted his job before the election.

"I have indicated to him ... that in the end the will of the party and the interests of the party are paramount," Mr Howard said.

"I think it is self-evident that Mr Costello would like to succeed me ... I understand and I respect that. I'm the last man in Australian politics to deride ambition in another."

The meeting followed days of bickering between the pair over the Liberal leadership.

Despite calls for Mr Costello to either move to the backbench or challenge for the party leadership, the pair acknowledged tensions but said their 10-year partnership would continue.

But with time running out for Mr Costello to take over before the run-up to next year's election, Mr Howard refused to give any indication of his political future.

The public eruption of long-standing frustrations over Mr Costello's succession as Liberal leader came after a former Defence Minister, Ian McLachlan, confirmed he had been present at a meeting between the two men in 1994, when Howard had promised to hand power to his deputy after two terms. Howard has since served four terms and still refuses to discuss retirement.

Howard and Costello have all but called each other liars over their recollections of the meeting, although Howard yesterday denied that either had accused the other of untruths, saying instead that they had "strongly diverging views".

But the public brawl has further damaged a Government that has been sliding in popularity and increasingly arguing within itself.

Recent polls have placed Labor in an election-winning position.

Howard conceded that the leadership row and the contradictory accounts of the 1994 meeting had hurt the party and the Government.

"There's no point in beating about the bush," he said. "This has been a bad couple of days for the party ... It would be childish to pretend otherwise."

The priority of both Howard and Costello yesterday was to convince Australia that the Government remained united and that the two men and Liberal MPs believed their partnership would survive.

"I do not believe the professional relationship between me and Mr Costello has broken down," Mr Howard said.

Mr Costello, while refusing to back away from his version of the 1994 meeting and his claim that he had been promised the leadership, also pledged to work for the best interests of the party and the nation.

He said that even after 12 years of disappointment, the issue was not one of hostility between him and Howard.

"I thought the responsible thing to do was to work for the Australian people and the Government and that is what I am doing," he said.