THE Liberals were continuing to play the blame game last night as Peter Costello handed John Howard responsibility for the party's massive electoral defeat.

The Treasurer, who aspired to be prime minister, was denied his opportunity after Mr Howard refused to retire despite diminishing support in cabinet.

Mr Costello never challenged for the Liberal leadership and, a day after the Coalition's big election defeat, retired to the back bench, declining to lead the Liberals in opposition.

Mr Costello said on the ABC the Coalition could have "neutered" Kevin Rudd's message of new leadership if Mr Howard had stepped aside. "We could have neutered that appeal of Labor if we had a fresher face, but we didn't," he said.

He also questioned why Mr Howard had asked the outgoing Foreign Minister, Alexander Downer, to canvass cabinet ministers about their support for the Prime Minister during the APEC meeting in Sydney.