OTTAWA - Michael Ignatieff and Bob Rae have struck an informal non-aggression pact in a bid to avoid turning the coming Liberal leadership contest into another divisive showdown between the two perceived front-runners.

Rae said Tuesday the two men have reached an understanding that the race must be kept civil and respectful.

He said it's in the best interests of the party, which has been plagued by fratricidal infighting between leadership factions for at least two decades.

But it's also in both men's self-interest to avoid a replay of the 2006 leadership contest, when the enmity between their camps was so great that it prevented either of them from winning. The polarization enabled Stephane Dion to come up the middle and take the prize.

Neither Rae nor Ignatieff, lifelong friends and former university roommates, have declared their candidacies to succeed Dion, who announced Monday his intention to step aside as soon as a replacement is chosen. But both are considered certain to take the plunge.

Rae said the two former rivals have met often specifically to discuss how to reduce the animosity that erupted between their camps in the last contest.

"Public speculation notwithstanding, we speak often, we talk a great deal and meet a great deal and talk these issues through," Rae said in an interview.

"If we can keep doing that then I think that the risk of (another polarizing clash) is much exaggerated."

Rae said the two have specifically talked about the prospect of another leadership race.

"We've talked about the importance of civility, talked about the importance of people working together, talked about the importance of how we build the party, talked about the importance of how we make sure that we can defeat the Conservatives," he said.

"That's the objective ... and that's a much more important objective than who wins the leadership."

Ignatieff, who has kept a low profile since Dion announced his decision to step down, was not available to comment.

The spectre of an Ignatieff-Rae grudge match worries some Liberals who are casting about for an alternative heavyweight contender who could change the dynamic of the race. New Brunswick premier Frank McKenna and former deputy prime minister John Manley are among those being urged to run.

The prospect of another polarized contest is also encouraging lesser-known contenders -- such as New Brunswick MP Dominic LeBlanc and Montreal MP Denis Coderre -- to consider taking the plunge in hopes that they, like Dion, can make a run up the middle.

But Rae said he and Ignatieff must impress upon their troops that this time will be different.

"I've talked about this with Michael and we've talked about it a lot," he said.

"There really is an obligation on our part to make it clear to everyone that this is not a winner-takes-all struggle. It's a matter of building a better team ... and we do it most effectively by having a very civil campaign."

Rae, one-time NDP premier of Ontario, said the Liberal party has allowed continuing leadership feuds over the years to create a "culture of gossip, rumour and innuendo" that has undermined party unity. And he said it's incumbent on leadership candidates to demonstrate, by their own conduct, that those days are over.

"There's no stupider emotion than jealousy and revenge. These are truly dumb emotions and if you can't overcome those and look at the bigger picture, you've got no business being in this business."

The Liberal national executive is to meet Nov. 8 to set a date and location for a leadership convention and impose a spending limit on candidates.

Due to a paucity of available venues, party president Doug Ferguson said Tuesday, a planned policy convention, booked for May 1-4 in Vancouver, will most likely be turned into a leadership convention.

Ferguson said he also expects that the spending limit imposed on contenders for a six-month contest will be lower than the $3.4-million each was allowed to spend during the 11-month race in 2006.

But given the party's desperate shortage of cash and new rules restricting donations, Rae said he doubted anyone can afford to wage a six-month campaign.

He said he'd prefer that the convention be held as quickly as possible with candidates held to a spending limit of about $1 million.

"Collectively, I don't think we have sufficiently embraced the cultural shift that's required by the change in (political financing) rules," he said, noting that the donation limit for leadership campaigns has been reduced to $1,100 from $5,400 last time.

"There's still an expectation that a lot of activities will go on, a lot of flying back and forth will go on, a lot of meetings will go on, a lot of people will be paid as organizers ... and somehow all this will be magically paid for."

Rae and Ignatieff have both paid off their debts from the last leadership contest.

Dion still owes about $200,000. Some of his former rivals who are contemplating a second stab at the top job -- Martha Hall Findlay and Gerard Kennedy -- are also still in debt.

Ferguson said there is nothing in party rules that forbids someone from entering a leadership contest before clearing debts from a previous contest.