(Agencies)
Updated: 2007-09-17 16:22

SYDNEY - Australian Prime Minister John Howard on Sunday brushed off fresh speculation he would retire within days to save his party from electoral disaster, insisting he could still win re-election.

Australian Prime Minister John Howard (L) stands with Treasurer Peter Costello prior a meeting in Canberra, on 11 September 2007. Howard has brushed off fresh speculation he would retire within days to save his party from electoral disaster, insisting he could still win re-election. [AFP]

Howard denied reports he was considering stepping down in the face of dismal opinion polls and discontent within his conservative Liberal Party.

"My position was outlined last week and you know me, it hasn't changed," he told reporters. "All elections are tough, and I've been saying for a year this one's the toughest. But I believe the coalition can win the election."

Howard has been under intense pressure for more than a week after it was revealed that the majority of his cabinet questioned whether the coalition government would have a better chance of being returned if the 68-year-old stepped down in favour of Treasurer Peter Costello.

Ultimately, they put their support behind Howard to fight it out against a resurgent centre-left Labor Party led by Kevin Rudd.

But the speculation has continued, with Sydney Morning Herald journalist Alan Ramsey writing Saturday that Howard could be rejected at a party meeting held after the release of a new poll this week.

"His Liberal colleagues, a good many of them now as fed up as they've been despairing for much of this year, could perhaps still oust him before voters get their chance at retribution," he wrote.

"Don't think they still couldn't say, 'What have we got to lose?', and dump him for Peter Costello, even at this late stage."

But Costello said he would not challenge Howard ahead of the election.

"My position is today as it was last week and as it was last year," he said.

"I'm going to this election as a team. John Howard asked me to go to this election with him as his deputy leader and his treasurer. Last year, I said I would. I will. That's it."

Workplace Relations Minister Joe Hockey dismissed speculation that Howard would retire as "absolute rubbish" but conceded that it could further damage the government's standing in the polls.

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