Speaking ahead of next month's election, Australian political leaders have confirmed they will only consider ratifying the Kyoto agreement after 2012 if other developed and developing countries like the US and China take the lead.

Both Prime Minister John Howard and Opposition leader Kevin Rudd have now said that signing the agreement could cut jobs and damage the Australian economy. They added they are only open to the idea of backing the treaty - which aims to cut the world's greenhouse gas emissions and preserve the environment - if other major world leaders sign up first.

Rudd, who is ahead in the polls, had pledged to sign up to Kyoto and cut carbon emissions by 60 per cent before 2050. But in what is being painted by the opposition as a U-turn he today insisted that it was "absolutely fundamental" that developing countries such as China also sign up before Australia commits to any post-Kyoto agreement.

Rudd's comments came as he attempted to reduce the fallout from an embarrassing u-turn from his environment minister Peter Garrett who yesterday claimed that China and India's involvement in a post-Kyoto accord was "not a deal breaker" for Australia, before changing his position several hours later.

Labor's insistence that China and India must now also sign up to binding emission cuts echoes that of incumbent prime minister Howard, who has been a staunch critic of Kyoto but has recently softened his stance and signalled his government may sign a new agreement if developing nations are involved.

"It's a plan for reducing Australian jobs and not reducing Australian emissions," Howard said of ratifying Kyoto. "The idea of a new international agreement which did not apply to developing countries would be very damaging to Australia."

However, he added in a recent interview with ABC radio: "We are willing to ratify (a new) international agreement … provided it also applies in an appropriate way to all of the world's major emitters."

Treasurer Peter Costello said Australia would already meet the Kyoto targets and indicated he would like Howard to put more pressure on the US to sign the treaty - raising suggestions of an inter-party rift just weeks before the November 24 Federal Election.

World leaders will discuss plans for a new phase of Kyoto, which will expire in 2012, in Bali, Indonesia, in December.

Should developed nations such as the US and Australia agree to join a post-Kyoto program, critics of the international agreement fear costs for businesses could balloon.

They argue that Australia may have to pay billions of dollars to countries that have accumulated carbon credits - stripping company earnings and potentially raising taxes.

They also point to New Zealand, which signed Kyoto in 2002, and has already racked up a bill of more than $700m - a figure expected to soar past $4bn in the next five years.

Additionally, should China join the Protocol, developed countries that rely on it for cheap manufacturing could also be in for a significant financial blow.

However, advocates of the agreement argue that Australia has lost international standing as a result of its refusal to sign up and insist that the country has failed to invest sufficiently in the low carbon technologies that would make compliance with Kyoto possible.