Barnett thinks WA Labor's still in trouble

Body language in the corridors of Western Australia's parliament leads Premier Colin Barnett to believe Labor's leadership troubles aren't over.

Days after the WA Labor caucus unanimously backed Mark McGowan as opposition leader following a short-lived challenge by former federal minister Stephen Smith, Mr Barnett said he believed the games had just begun.

"I don't believe that issue is over - just looking at the body language of people around parliament, I think there's still more to come," Mr Barnett told ABC radio on Thursday.

Mr Smith conceded defeat on Tuesday following the caucus vote, saying he would not challenge for the leadership between now and the March 2017 election.

"I will absolutely respect and abide by that (caucus) decision," Mr Smith told reporters, adding those within the party who urged him on had done so in good faith.

"I absolutely rule out challenging Mark McGowan as leader of the Labor party between now and the next state election."

Mr McGowan said on Wednesday he believed the challenge had galvanised his leadership and strengthened the party, but acknowledged his time as leader would be "finished" if he lost the next election.

Mr Barnett has acknowledged winning a third successive term will be challenging for his government and reiterated on Thursday that if re-elected, he will only serve part of it.

"This will be my last term if I'm re-elected and somewhere towards the end of that term I will obviously hand over to a successor," he said.

"Any opposition leader would be a threat to a government going for a third term - it's a big ask to ask the public to support a government into a third term."

Speculation lingers that Mike Nahan may be a replacement for the 65-year-old premier, but the Treasurer has emphatically denied any interest.