THE bitter fallout between former best friends and political allies Peter Costello and Michael Kroger erupted in spectacular public acrimony yesterday with Mr Kroger painting Mr Costello as an embittered man who spent his time running down his former colleagues and Mr Costello accusing Mr Kroger of completely fabricating a story about the former treasurer's desire to return to federal politics.
Mr Kroger insists that at a lunch last October at a Melbourne club, Mr Costello asked for his friend's help to persuade a young MP in a safe seat, possibly Josh Frydenberg, in Kooyong, to stand aside so Mr Costello could return to Federal Parliament. According to Mr Kroger, his rift with his former friend came about when he refused.
Mr Kroger says he has a clear recollection of the day.
''I don't drink. I'm not suggesting he drank too much at that lunch but I have a very clear focus … about the event.''
But in a statement yesterday Mr Costello states: ''I have not sought to return to Parliament. I have not sought Mr Kroger's assistance to do so.''
Mr Costello's supporters say Mr Kroger fabricated the story about the rift to explain his fading abilities as a ''powerbroker'', most recently exemplified in his failure to secure a safe position on the Victorian Senate ticket for his former wife, Senator Helen Kroger.
Backbenchers told the Herald Mr Kroger had threatened their future preselections if they did not help in Senator Kroger's pre-selection fight.
''He threatened several pre-selections. He made threats to me,'' one said.
''I know he was certainly very threatening to some people, but it didn't work,'' another said.
Mr Costello said Mr Kroger had contacted him ''a number of times'' asking that he intervene in the Senate preselection. ''I declined to do so … I did not ring a delegate,'' Mr Costello said. Senator Kroger was relegated to the less safe third position on the Senate ticket.
But according to Mr Kroger, who gave his version in two extended radio interviews yesterday, the fight is all about Mr Costello's disappointments and thwarted ambitions.
''After 35 years of being Peter's best friend, ally and supporter even I … am at my wits' end with Peter … Peter made a decision in 2007, I think the wrong decision, to spit the dummy and leave the Parliament. He could have stayed, he should have been opposition leader, he could have been prime minister … now for five years he's been like a bear with a terribly sore head … attacking everyone,'' Mr Kroger said.
''Why do I not talk to Peter much these days? Because as all of his ex-friends know, lunch with Peter is an agony, it's a nightmare, you sit there and listen to him unload on [John] Howard … he doesn't like [John] Hewson, he doesn't like [Malcolm] Turnbull, he has never been all that friendly with my former father-in-law, the great Andrew Peacock … he doesn't like Alexander Downer … and he's been publicly critical of Tony Abbott, calling him a DLP stooge and an economic illiterate,'' Mr Kroger said.
''Peter's got to stop criticising Tony Abbott, he is not an economic illiterate, he was a Rhodes scholar, for God's sake … Peter has got to move on and stop bagging everybody.''
Mr Kroger said the famed ''Kroger/Costello faction'' of the Liberal Party had existed to get talented young people into Parliament who would eventually vote for Mr Costello to become prime minister but ''we could never get the numbers against John Howard because John was too good, too popular, too great''.
His attacks rocked the Liberal Party, with the shadow treasurer, Joe Hockey, remonstrating with Mr Kroger as they passed in a corridor at a radio station.
Mr Hockey was angry that Mr Kroger's spray was distracting from the Coalition's response to Tuesday's budget.
But other senior Liberals confirmed that Mr Costello ''never has a good word to say about any of his former colleagues''.
In his statement, Mr Costello said: ''I frequently speak to Tony Abbott and advise him as he requests.
''We had a private dinner in Melbourne recently to discuss positioning for the budget. I regularly speak to Joe Hockey and other senior MPs about policy matters.''
Asked about the spat, Mr Abbott said: ''I gather there's a bit of a disagreement. I hope it's resolved as quickly as possible.''
But Mr Hockey said: ''I wish they'd do it in private rather than sharing it with everyone across Victoria.''