Video report by ITV News Political Correspondent Paul Brand
Angela Eagle has insisted she can save Labour as she prepares to formally launch a leadership contest with the potential to rip the party apart.
The former shadow business secretary is hoping to oust Jeremy Corbyn amid warnings the bitter rows over the party leadership could lead to a legal wrangle or lasting split
Eagle told Peston on Sunday that Corbyn was not a "bad man" but was also "not a leader".
Eagle said she was the right person to lead Labour into the next election - which she said could come earlier than 2020.
She also said she believed Corbyn will have to get nominations to be on the ballot but the decision was down to the party's National Executive Committee.
Corbyn said he was "disappointed" by Eagle's leadership bid and urged her to "think again" but said he would fight any challenge.
He also hinted that he would mount a legal challenge if he was not on the leadership ballot.
Eagle, who recently quit as shadow business secretary, accused the current leader of "hiding behind a closed door" over calls for him to step down.
Corbyn earlier told the BBC's Andrew Marr Show that he had "reached out in a way no other leader has" in an attempt to unite all parts of the party.
Asked about Eagle's challenge, Corbyn said: "I'm disappointed, but obviously she is free to do that if she wishes to."
The 67-year-old said he had never considered stepping down, insisting "there's no wobbles, there's no stress, there's no depression" and that Labour was "going places" under his leadership.
In a message to his MPs, Corbyn said: "I urge them to think again about what they are doing."
He dismissed suggestions from former shadow cabinet minister Owen Smith, who is thought to be considering his own leadership bid, that he would split the party.
"I joined the Labour Party when I was 16, I've been in the Labour Party all my life - I have no idea why Owen should say such a thing," he said.
Labour has been embroiled in turmoil since Britain voted to leave the European Union.
A wave of shadow cabinet ministers resigned in protest at Corbyn's leadership, accusing him of not doing enough to convince Labour voters to vote Remain.
Corbyn has remained defiant and the unions have also thrown their support behind the 67-year-old.
Len McCluskey, the leader of Unite, Labour's biggest donor, has warned of a "lasting division" in the party if Corbyn is not allowed on the ballot.
Our Political Editor Robert Peston said the contest is "highly likely to culminate in the break-up of the party".
Eagle said she would stand against Corbyn hours after Tom Watson, the party's deputy leader, called off peace talks with union bosses.
McCluskey criticised Watson, accusing him of an "act of sabotage fraught with peril for the future of the party".