Former Labor leader Mark Latham says he is not optimistic that Saturday's federal poll defeat will help bring about party reform.

He says that despite Kevin Rudd's attempt to give party members a bigger role in electing the new leader, the person who he thinks is best placed to lead a reformed ALP is unlikely even to be considered.

"If you took that logical, objective criteria, there's only one person who could possibly match it, and that's Mark Dreyfus, the outgoing attorney-general," he said.

Mr Latham, who lost the 2004 election to John Howard, says Labor at Caucus level has become dysfunctional.

"It's become an example of institutionalised instability and chaos," he said.

"If you sat back objectively and said, well what does Labor now need in its leadership, you'd say we need someone who's not from the union background.

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"Someone who's not part of the sub-factional warlords - the people immersed in the Rudd-Gillard quagmire over the last three years."

Mr Latham says Mr Dreyfus will not be running for leadership because "he's not part of the gang".

"That's the sad thing about Labor, that objectively the person who could present a new face, a new outlook, won't even be thought of.

"We're going to go back to what? Shorten - union, union, union - or Albanese - warlord, warlord, warlord.

"I mean, if they don't change themselves now, in the dark night of defeat, you'd have to think what hope is there for the future?

"The lasting legacy of the Rudd return should be to embrace his call for comprehensive party reform."

Candidates keep cards close to their chests

Mr Latham says the election result has proved the old Labor ways are broken and that the party must be opened up and give members more of a say.

But he says he fears change won't occur.

"I come out of this system knowing how it works. I know the sort of telephone calls that are being made right now as these sub-factional warlords try and do for the next three years effectively what they've done for the last three years - continue to wreck the modern Labor Party," he said.

"I would have thought two days after an election defeat you'd have a number of candidates nominating, but they're all keeping their cards close to their chest.

"They'll all be wheeling and dealing behind the scenes and it's a very bad sign at this stage. I hope I'm wrong."

Latham says switch back to Rudd not justified

While Labor's loss was not as bad as some had predicted, Mr Latham says the the result does not justify the leadership switch from Julia Gillard to Mr Rudd.

"I don't think it's really arguable that he somehow saved the furniture," he said.

"When Julia Gillard left office, on her last day as prime minister, the betting markets were saying that Labor was going to win 50 seats. The result looks of the order of 55 to 56.

"Is it really worth it? I think the saddest part of Labor's campaign wasn't on the campaign trail, it was below the surface. The number of branch members and electorate staff, organisers, who told me that after the Rudd-Gillard civil war, the treachery, the bastardry, for three years, their heart wasn't in it this time."

"So the part of the Labor Party that matters most - its heart, its soul, its rank and file - for them the story is pretty sad indeed."