Liberal Party federal director Brian Loughnane says his party should not follow Labor's lead and allow rank-and-file members to elect the parliamentary leader.
This month, Bill Shorten became the first person in his party's history to be elected Labor leader by a vote of both the parliamentary caucus and grassroots members.
Prior to the party rule change only caucus members had a vote.
Senior Labor figures have hailed the decision as a step forward in democratising the party and urged the Liberals to follow suit.
But Mr Loughnane said the Labor vote was a "charade" and merely reinforced the control of the party by factional leaders.
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It had also led to the problem of Mr Shorten having the majority support of the caucus, but minority support in the broader party.
"I suspect ... in the fullness of time all the parties will move towards more wider plebiscites for the election of leaders, but I personally think that is a mistake," Mr Loughnane told the National Press Club on Wednesday.
"It is incompatible with Westminster democracies."
He said the system could only work if, as in the United States system of "primaries", the vote involved many hundreds of thousands of people.
"For it to work it's almost got to be a genuine primary and that would fundamentally change our democracy."
