Government leaking like a sieve: Abbott

AAP

Federal Opposition Leader Tony Abbott has rejected claims the coalition is trying to stir up Labor leadership speculation, saying Labor is doing its own leaking.

Mr Abbott says the government is divided and dysfunctional and is in panic.

"Look, you get the calls, you read the papers, you know this government is leaking like a sieve," he said.

"You know there are people in this government who can't wait to do each other in.

"That is the fundamental source of everything that is circulating in Canberra right now."

Yesterday afternoon, the rumour mill went into overdrive in Parliament House before Kevin Rudd's camp dismissed speculation of an imminent challenge to Prime Minister Julia Gillard.

The government has been suffering in the opinion polls, which continue to point to a likely coalition win at the September 14 election.

"It's a government which is in panic - they are in panic at the prospect of electoral disaster," Mr Abbott said.

Asked if he was concerned about complacency within his ranks given the favourable polls, Mr Abbott said he didn't think anyone would say his team was doing anything other than working hard.

Mr Abbott was attending the Liberal party's federal executive meeting in the capital.

Mr Rudd, who was ousted as prime minister in 2010, has repeatedly said he wouldn't challenge Ms Gillard again, after losing to her in February last year.