Have your say: Should Costello finally have a tilt at Howard?
Liberal leadership tensions look set to erupt again after a new airing of claims that Peter Costello threatened to destroy John Howard's leadership unless the prime minister stepped aside within a year.
Mr Costello is alleged to have told a group of journalists in 2005 that he wanted Mr Howard to stand aside by April 2006, threatening to challenge the prime minister if he would not go willingly.
The treasurer, it is claimed, went on to indicate he would go to the backbench if necessary, and destroy Mr Howard's leadership from there until Mr Costello was finally successful.
Mr Costello also reportedly said in 2005 that at the next election: "Howard can't win. I can. We can, but he can't".
The comments attributed to Mr Costello by ABC TV's 7.30 Report are not entirely new, and were alluded to in a recent article in The Bulletin.
The Canberra dinner in March 2005 at which the remarks were made had been declared off the record, ABC TV's Michael Brissenden said , but he had kept notes from the event.
The fact that Mr Costello had twice denied making the "Howard can't win" remark was justification for now making the treasurer's remarks public, Brissenden said.
Asked if the report was true, Mr Costello denied it and then went on to take a swipe at journalists and use of sources.
"I must say, when I read some of these things I wonder where the journalists get them from," Mr Costello told the Nine Network.
"They generally speak to somebody who's spoken to somebody, who was down the back of a pub, who heard the barman say and it gradually finds it way into magazines or articles. But no, that's not the case."
Labor's Wayne Swan said Mr Costello had effectively been accused of lying about his remarks.
"The treasurer must now immediately explain his denials if he is to retain any credibility in public life," Mr Swan said.
"It is clear from tonight's revelations that the working relationship between Mr Costello and Mr Howard is beyond repair and can only undermine the government's capacity to govern in the national interest."
The public airing of the remarks will add fuel to the constantly simmering tensions between Mr Costello and Mr Howard on what should have been a night of celebration for the treasurer - his 50th birthday.
Long-running leadership tensions reached a nadir last year when former minister Ian McLachlan confirmed that a handover discussion took place in 1994, where Mr Howard promised to hand the leadership to Mr Costello after one and a half terms if the coalition won the 1996 poll.
The tensions have been rumbling since Mr Howard, in 2001, promised to consider his future near his 64th birthday in 2003.
The prime minister decided to stay on, leaving Mr Costello obviously disappointed.
But then, and at subsequent times he has refused to challenge Mr Howard.
Labor has long chided Mr Costello for not having the courage to follow the example of former prime minister Paul Keating, who went to the backbench after unsuccessfully challenging his predecessor Bob Hawke in June 1991.
Mr Keating was successful during a second challenge in December that year.
The revelations could be even more damaging for the Liberals, coming so close to the next federal election, and could sound the death knell for Mr Costello's leadership hopes.
Brissenden said he was present at the dinner with Mr Costello and other journalists, including then-Bulletin writer Tony Wright, at a Canberra restaurant on March 5, 2005.
Brissenden said he made notes of a conversation in which Mr Costello said he would "destroy" the prime minister's leadership.
He said the treasurer told the group he had set April 2006 as the "absolute deadline" for Mr Howard to stand aside, or else he would challenge him.
"He said he was prepared to go to the backbench," Brissenden recounted.
"He said he would `carp' at Mr Howard's leadership from the backbench and `destroy it' until he won the leadership."
As the allegations were airing on television tonight, Mr Howard was joining Mr Costello for birthday drinks at Parliament House.
Mr Costello's office was not immediately available for comment.
Mr Howard would not comment as he left the function.