SYDNEY, July 10: A dramatic public confrontation erupted between Australia’s prime minister and his ambitious treasurer on Monday over an alleged promise to hand over power.

Just hours after conservative Prime Minister John Howard, 66, denied making such a promise, Treasurer Peter Costello, 48, called a news conference to say that he had.

“There was no deal made,” Howard said, denying a reported account of a meeting with Costello in December 1994.

Costello, apparently deciding to take the gloves off after years of sparring over the premiership, said, however, that Howard had asked him at the meeting not to stand for the party leadership.

“He told me that he intended to do one-and-a-half terms as prime minister and then would hand over. I did not seek that undertaking, he volunteered and I took him at his word,” Costello said. “Obviously that did not happen.”

After Costello’s astonishing remarks, which came close to calling Howard a liar, the prime minister issued a statement which did not dispute the treasurer’s account of the 1994 meeting, but again said there was no deal.

“Nothing said by Mr Costello today has in any way altered the position that no deal was made about a leadership transition,” he said through a spokesman.

Howard became the most powerful Australian leader in a generation last year when his ruling coalition gained a majority in the senate, giving it control of both houses.—AFP