Gillard sworn in as first female Australian PM

Julia Gillard and Kevin Rudd

CANBERRA - Australia has its first female prime minister after the ruling Labor party dumped Kevin Rudd and installed his deputy as leader.

Rudd stepped down before a leadership ballot this morning.

Sky News estimated 74 of 112 party MPs would have voted for a leadership change, in favour of Deputy Prime Minister Julia Gillard.

Gillard, a former lawyer, was this afternoon sworn in at Government House in Canberra.

Treasurer Wayne Swan becomes the new deputy prime minister.

She acknowledged she was not an elected prime minister and said she would be calling an election within months.

It was "with the greatest humility and resolve" that she had accepted the endorsement of her colleagues to be prime minister.

The upcoming election would seek public consensus for herself as prime minister and a number of issues, including carbon pricing, she said.

"I take my fair share of the responsibility for the Rudd Government's record ... it didn't do all it said it would and at times it went off-track."

She had asked her colleagues for a leadership change because she had felt responsibility to put the government back on track, she said.

Although hailed as a trailblazer by some, Gillard said she had not set out to break any glass ceilings.

"First woman, the first redhead, maybe, and I'll leave you to contemplate which was more unlikely in the modern age," she said.

Gillard paid tribute to her predecessor, saying while they had disagreed on the direction of the Government, Rudd had made "remarkable achievements".

She said Rudd would have a future with the party.

She also said she was "happy" in her Canberra apartment and was likely to stay there rather than moving into the prime minister's house until elections.

Key offers congratulations

Prime Minister John Key congratulated Gillard this afternoon and said he looked forward to meeting her soon.

They talked briefly at 12.30pm, barely an hour after she took over the top spot.

"I am confident that the very close relationship between the two countries will remain strong," he said.

He also acknowledged the constructive relationship he had with Rudd.

"He has always been a gracious host when I have visited Australia and our discussions have always been ones I have enjoyed."

Labour leader Phil Goff echoed Key's sentiments, saying he looked forward to working with her to "advance the special relationship" between New Zealand and Australia.

"I would also like to acknowledge the achievements of outgoing Prime Minister Kevin Rudd," he said.

"Mr Rudd worked tirelessly for his country. Whenever we met for discussions he recognised the strong bonds that exist between our countries."

It is unclear who will represent Australia at the G20 summit in Canada, which Rudd was due to attend.

However, his scheduled visit to Wellington next week, where he had been invited to address the House of Representatives - the first foreign leader to do so - has been cancelled.

'Formidable' Gillard rises to top

Meanwhile, Gillard's parents, John and Moira Gillard, said they were both stunned at today's turn of events.

"In our wildest dreams, we would not have anticipated anything like this."

Mr Gillard said his daughter was always destined to be a high achiever, describing her as a "formidable person, highly intellectual".

"Julia, in whatever endeavour, would have risen to the top I think, or certainly to a strong position," he said.

He believed his daughter would win the looming election but described Liberal leader Tony Abbott as "an adversary that is formidable".

"I hope it will be a clean election, I hope it will be fought on issues that confront the country, that it will not be a race to the bottom of the barrel, as it were."

The way forward

Gillard will now lead the government to elections later this year.

However, she is unlikely to alter Australia's key foreign policy positions such as its troop commitment to Afghanistan.

Some of her opponents have attacked her as out of touch with most Australian because she is childless.

But supporter Senator Kate Lundy said Gillard would turn around the government's poor polling.

"I think she'll inspire a new confidence in Labor," Lundy told ABC radio.

"I think we were at risk [of losing the next election] and I think Julia presents a much stronger opportunity for us."

Revolt takes Rudd by surprise

A surprise revolt last night forced Rudd to call for a party leadership vote, just months away from national elections.

The challenge to Rudd's leadership emerged after anger erupted last night after right-wing Labor factions and key unions in Victoria and South Australia - including the Australian Workers Union - announced they would no longer support him.

Queensland Senator Barnaby Joyce said the overnight coup attempt had been engineered by factional leaders who had taken over the running of the country.

"It is running on auto-pilot in the face of faceless people and faceless men who [were] never elected," Senator Joyce said.

"We're basically realising that the whole direction and metaphor of this government was flawed."

Subsequently, key government figures such as Treasurer Wayne Swan, defence minister John Faulkner and Stephen Smith backed Gillard to replace Rudd in the top job.

Rudd won a landslide election victory less than three years ago but suffered a recent plunge in opinion polls, partly due to plans for a new mining tax scheme.

A survey of 1,147 people published in the Australian this week found a record 55 per cent were dissatisfied with Rudd, Bloomberg reported.

He also pushed an ultimately doomed emissions trading scheme which Parliament failed to support.

Rudd initially appeared confident of retaining party support yesterday before his decision to stand down today.

"I believe I am quite capable of winning this ballot tomorrow," he said.

Instead, Gillard stood unopposed at a vote of the party's lawmakers at a meeting this morning.

Caucus returning officer Michael Forshaw told reporters the meeting was conducted in a "very orderly manner".

"I can say it was a very gracious speech by the prime minister and also by the new leader and deputy leader."

When asked if Rudd had displayed any emotion at the meeting, Forshaw said it had been a difficult time for both Rudd and the Labor Party.

"He led us to victory in 2007, a victory that was achieved when many people thought that we would still be spending more years in opposition," he said.

- AP, AAP, NZHERALD STAFF