Opposition treasury spokesman Malcolm Turnbull says Peter Costello is entitled to change his mind and stay in politics - but he's not aware of any change of heart.
News Limited has reported that Mr Costello will not challenge for the Liberal leadership but may agree to to a "friendly takeover" if incumbent Brendan Nelson opts to stand aside.
Mr Turnbull, himself a potential leadership contender, says Mr Costello has the right to take his time in making his intentions known.
"Peter Costello stated his intentions at the end of last year and if he seeks to change those intentions he's entitled to do so, but he can do so in his own time," Mr Turnbull told ABC Radio.
"As far as I'm aware his intentions are precisely as he stated them at the end of last year."
Mr Turnbull says the real leadership issue in Australian politics "is the lack of leadership from Kevin Rudd".
"The only ambition that we should be focused on today is the ambition of Kevin Rudd to become prime minister on the basis of one false hope, one false promise after another," he said.
"There has never been an Australia prime minister who has let down the people as quickly as Kevin Rudd."
