Former Liberal foreign minister Alexander Downer says comments he made about Kevin Rudd have been misinterpreted.

News Limited is today reporting that Mr Downer gave Mr Rudd information that he knew that Mr Rudd would then leak.

The report says Mr Downer claims Mr Rudd then used it by feeding it to the media to embarrass Labor's then foreign affairs spokesman Laurie Brereton.

Mr Rudd eventually replaced Mr Brereton as shadow foreign affairs minister.

But Mr Downer has released a statement this morning saying the interpretation placed on the comments he made are "wrong".

"The interpretation placed on my comments to the Sunday Telegraph is wrong," he said.

"Kevin Rudd was not used by me or other members of the Liberal Party as a so-called 'double agent' to leak material against other members of the Labor Party."

Mr Downer says the journalist who wrote the story has "created a more controversial story than my comments warranted".

Through a spokesman Mr Rudd has also denied the substance of the report.

He says the allegations are completely and utterly false and he is seeking legal advice.

"These are serious allegations. Mr Rudd takes them seriously," Mr Rudd's spokesman said.

Today's claims come at the end of a week that has has seen Labor's election campaign dominated by issues surrounding Mr Rudd.

Prime Minister Julia Gillard has been dogged by questions over what role Mr Rudd may play in the election campaign.

On Friday he was admitted to hospital to have his gall bladder removed, and said at the time he would be happy to campaign outside his electorate on behalf of the party.

Labor's campaign has also been damaged by several leaks in recent weeks.

Treasurer Wayne Swan has accused the Liberal Party of "putting the boot" into Mr Rudd while he is in hospital to have his gall bladder removed.

"They'll do anything to avoid a discussion about the real issues in this campaign," he said.