Are you able to use open id to log into the local development server with google app engine sdk version 1.4.1 and python 2.5?

When I execute this

self.redirect(users.create_login_url(continue_url, None, openid_url))

I get redirected to http://localhost/_ah/login rather than the openid url. The openid url and continue url are valid.

My app.yaml looks like this

- url: /_ah/login_required
  script: do_openid_login.py

- url: /users/(.*)
  script: routers/user_router.py
  login: required

If I browse to http://localhost/users/ I am also redirected to http://localhost/_ah/login rather than http://localhost/_ah/login_required

Is there a config issue or does openid not work locally?