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IN the wake of yesterday's revelations that John Howard ratted on a December 1994 deal to hand over the prime ministership to Peter Costello after two terms, there are a number of canards doing the rounds.

Let's dispel them.

First and foremost is the suggestion that the story was dropped by Costello or his supporters to generate pressure on Howard to make a decision earlier rather than later on his future. Ian McLachlan is the key figure in this tale. He witnessed the 1994 meeting between Howard and Costello, and recorded Howard as giving Costello an "undertaking" that he would stand aside in his favour.

Neither Costello nor his backers had anything to do with this information coming to me. The Treasurer didn't even tell his wife, Tanya, about the meeting with Howard 12 years ago. The story took six months to prepare, and anyone who is interested in how these things happen should note that as well as some senior Liberals, McLachlan had told the tale of betrayal to one of Australia's leading business figures.

In other words, the story was out there. McLachlan didn't deliberately leak it. He's not that sort of person. Old school, an aristocratic farmer from South Australia, straight as a die, he carried his secret in sergeant major style for 10 years and never thought once about letting it go.

But what is clear is that during this time he came to believe that Howard's behaviour in relation to Costello was dishonourable. He talked to third parties because he was uncomfortable about what was happening as Howard dudded his deputy again and again. He worried constantly, hiding his contemporaneous notes of what happened at that crucial meeting in his wallet, fearful he'd leave them in the back of a cab.

Howard once told me that if he were in a war, there was no one he'd rather have next to him in the trenches than McLachlan. At the time the crucial meeting took place in December 1994, Howard is likely to have regarded McLachlan as a friend in the room. Indeed, Howard insisted McLachlan was there as his witness.

But time and context change. As the years marched on, with the economy in good shape and Liberal economic goals achieved, McLachlan observed a Treasurer who had earned his right to bigger things. McLachlan reckoned Howard had enjoyed his day and Costello deserved a shot.

But beyond that, also consider the circumstances of the meeting between the three men. This was not a chance encounter in a Parliament House corridor. It was a pre-arranged meeting in Costello's office in the same building, with a witness. These blokes weren't there to plan a weekend fishing trip. They all knew they had serious business to do.

What many people overlook is the context. This was December 1994. The line of attack on the relevance of Howard's commitment being mounted yesterday by his people was this: Why would he make an undertaking to step aside in favour of Costello after two terms as prime minister when he hadn't even got there yet?

In December 1994, Alexander Downer's leadership was already disintegrating. Howard had been approached via back channels to consider taking over. There were two obstacles to that happening: that Downer would dig in and fight (which he didn't), or that Downer's deputy, Costello, would contest a ballot against Howard.

Howard was desperate for the top job. My understanding is that it was Howard who proposed the two-term deal, so anxious was he to avoid a partyroom contest against Costello.

Bear in mind here that Howard had been dumped in 1989 as leader and was subsequently passed over again in 1990 and 1994. He didn't think he was going to get another chance. He would have done virtually anything to get there. And buying off Costello with a cheap bargain over the leadership was apparently in the frame.

The facts as they appear are these: The deal was a product of Howard's insecurity. He wasn't convinced he could win a partyroom ballot against Costello. So he went to him and gave him an undertaking about his future leadership prospects to ensure that such a ballot did not take place.

So, where to from here? Let's go to the Solomon Islands, where the latest episode in the decade-long Costello-Howard leadership soap was driven last week by a question from my News Limited colleague Malcolm Farr. The Treasurer, who was in the Solomons to attend a regional finance ministers' conference, was asked point-blank by Farr: "Can I just ask you a plain, simple question? Is there an understanding between you and Mr Howard as to his departure?"

Costello replied: "Look, these things have worked in the interests of the Australian people and the people concerned and there is no point in speculating on it."

The Treasurer was roundly ridiculed for talking gobbledygook. What is now clear is that Costello was desperately trying to speak the truth. He knew there was the 1994 pact and did not want to go on the record as saying anything else.

Howard has had no such compunctions: he has repeatedly said that there has never been a deal or any sort of understanding on the leadership.

All politicians have a capacity to render past history in the cast of their own view of the truth. But we now have a fundamentally different version of that truth. At the very least the McLachlan episode will reinforce the perception that Howard is a master of weasel words.

So much so that political insiders have been combing his statements on the notion of a leadership deal with Costello and note that he has always been careful to use the present tense to describe his position.

"There is no deal" has been Howard's position, rather than "there has been no deal".

But how long can this political word game go on? For anyone out there who has had occasion to doubt the Prime Minister's word, the latest development in his struggle with Costello confirms their opinions about Howard's trustworthiness.

For the moment, Costello will attempt to wait Howard out. The view inside the Treasurer's camp is that it is now up to the Prime Minister to explain his view of what happened in December1994. They fully expect he will try to insinuate his way through it.

But the danger for Howard is this: he now knows there is a written account of what happened at that meeting. Any attempt to dissemble could have disastrous consequences, should that document ever surface.

And, finally, a nice little post script: Pamela Williams's book The Victory - the inside story of Howard's 1996 ascent to the prime ministership - records him as denying in December 1994 any attempt to undermine Downer's leadership.

What was that about weasel words?

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