Australia's PM digs in amid leadership tension

CANBERRA, Sep 11 (Reuters) Australian Prime Minister John Howard flatly refused to quit today despite reports he had lost the confidence of two senior ministers amid a string of bad opinion polls ahead of looming elections.

''I have never run from a fight before and I don't intend to do so now,'' a stern-faced Howard, 68, told reporters in a clear message to critics within his conservative ruling coalition.

Howard, in power for 11 years, must call an election by the end of the year. Consistent bad poll figures have prompted some nervous ministers and backbenchers to suggest he should stand aside for his younger heir apparent, Treasurer Peter Costello.

''That matter was resolved last year. It is not in the party's interest to revisit it. That is my position, my very strong position,'' said Howard, referring to the leadership.

Howard said he believed he was best placed to lead the ruling Liberal Party into the election, where he will seek a fifth straight term, but said it would be difficult to win.

Sky television reported earlier that two of Howard's most loyal cabinet colleagues, Foreign Minister Alexander Downer and Environment Minister Malcolm Turnbull, had told him the party would be better off with a new leader.

The offices of both ministers today denied the report and said there was no push to force Howard to stand aside, although neither minister has made any public statement.

OVERWHELMING DEFEAT Opinion polls over recent months have consistently pointed to overwhelmingly defeat for the government at the election, with Howard and several ministers in danger of losing their seats.

The latest Reuters Poll Trend, released today, found the government trailed the centre-left Labor Party opposition by 14.7 points on a two-party basis, where minority votes are distributed to ultimately decide an election.

Costello, 50, has long been considered Howard's heir apparent, but his ambitions to take over have been frustrated by Howard, who has stubbornly refused to hand over power.

In July 2006, Howard crushed Costello's hopes of leading the government into this year's election, announcing that he would seek a fifth term, with an open-ended promise to remain leader.

Howard has consistently lagged Labor's Kevin Rudd, 49, in opinion polls since Rudd became opposition leader last December.

Defence Minister Brendan Nelson earlier stood by Howard, saying he should lead the coming electoral battle.

''I certainly don't envisage any circumstances in which the prime minister will not lead our government into the forthcoming election,'' Nelson told Australian television.

''Our country is moving in the right direction. John Howard and Peter Costello have got us into that situation.'' Health Minister Tony Abbott also expressed his confidence in Howard, telling Australian Broadcasting Corp. television late on Monday that Howard remained the government's best asset with a personal approval rating at a strong 50 percent.

''So the best thing we can do is rally behind the team. It's a good team, John Howard as Prime Minister, Peter Costello as Treasurer, make the best of a difficult situation,'' Abbott said.

''I think when it comes to the crunch, I still believe people are more likely to change the polls than to change the government,'' he said.

Howard said yesterday he had discussed his future with his family on Sunday night, and they had decided he should stay on.

REUTERS PJ KN0913