The interpreter does its best to do the right thing. You can
use as many spaces as you want, and as many tabs as you want.
You can even mix them, and also exchange them (to exchange
you need 8 space tabs).
If you read the Python style guidelines by Guido you aren't supposed to
mix tabs and spaces for obvious reasons.
http://www.python.org/doc/essays/styleguide.html
If you aren't going to take any other language features, other than
indentation, it seems a little misleading to associate the project with
Python? Isn't the only thing you'll gain that you don't have to type in
do...end ? You are free to indent how you like in Lua.