Speculation is growing that Australian Prime Minister Julia Gillard might be forced to open her job to a challenge from Foreign Minister Kevin Rudd within the next two weeks.

The publication of a tape of Rudd violently swearing while recording a message in Chinese before his ousting in June 2010, added to reports that Gillard backers are testing support among MPs, has created a new, possibly unstoppable momentum.

Constant rumours of instability have seriously undermined Labor's fragile minority Government and pushed the Opposition to an unbeatable lead in opinion polls.

Gillard needs to settle the issue once and for all if she is to refocus public attention and political energies on the Government's agenda, and rebuild support in time for next year's election.


Most observers had expected any challenge to wait until after the March 24 Queensland state election because a bloody brawl in Canberra would wreck whatever slim chance Labor Premier Anna Bligh has of retaining office.

A Galaxy poll in Brisbane's Sunday Mail put the LNP ahead by 60-40 per cent in the two-party preferred vote that will decide the election, after a Newspoll in The Australian placing the Opposition's two-party preferred support at 58 per cent.

Bligh yesterday appeared to accept the inevitability of a challenge. "I think it's time to put the whole thing to bed. Frankly I'd like it resolved."

Gillard said she believed she had majority support among Labor MPs.

"I have the strong confidence of my colleagues, their strong support, and my focus is on getting on with my job as Prime Minister," she said.

She would not comment on "hypothetical" numbers within the caucus, and it is unclear at this stage how many votes she and Rudd command.

While most assessments suggest Gillard has more committed supporters than Rudd, there is a significant pool of undecided MPs. But it is becoming increasingly clear a ballot is inevitable.

Although Rudd has repeatedly dismissed reports of a challenge - the last time on Sky News yesterday - Tasmanian independent MP Andrew Wilkie said he had discussed the leadership with Rudd in November.

Wilkie told Sky News that until he had spoken to Rudd he thought speculation about a challenge was "just media mischief" but that it became clear the former Prime Minister wanted the job back.

"There will be a challenge and I suspect [Rudd] may well be successful, and if he is successful then I will aim to work with him to get the sort of policy outcomes I want to see," he said.

Significantly, Wilkie said he had not spoken to Gillard since she reneged on her deal to pass new poker machine regulations and he said he would find it easier to work with Rudd. But the two other independents whose support remains central to Labor's survival, Rod Oakshott and Tony Windsor, have said they would reconsider their positions if Gillard was ousted by Rudd.

The future of senior ministers, including Deputy Prime Minister and Treasurer Wayne Swan, would also be in doubt if Rudd ejected Gillard.

On Saturday major newspapers said key Gillard ministers, including Trade Minister Craig Emerson and Attorney General Nicola Roxon, had been counting numbers in the caucus, increasing speculation that Gillard might launch a pre-emptive strike before Rudd had amassed a majority.

The appearance of the "Kevin Rudd is a happy little Vegemite" tape on YouTube brought the leadership tensions to an explosive head.

The tape, in which Rudd is shown banging the table and shouting obscenities, has been seen as an attempt by Gillard supporters to remind voters of why they had so disliked the former Prime Minister and had dragged support for him and Labor to dangerous lows before the coup.

The YouTube title is a reference to Rudd's standard reply to questions about his leadership ambitions: "I'm a very happy little Vegemite."

Gillard denied the tape came from her office.

But the ensuing row has pushed divisions to the surface.

While ministers such as Emerson, Roxon, and Health Minister Tanya Plibersek yesterday reiterated their support for Gillard, backbenchers joined the public fray for the first time.

Victorian MP Steve Gibbons attacked Rudd on Twitter: "Only a psychopath with a giant ego would line up again after being comprehensively rejected by the overwhelming majority of colleagues."

But fellow Victorian Darren Cheeseman told the Sunday Age: "Julia Gillard cannot take us to an election. She [would] decimate the party."

An unnamed senior minister told the Sunday Mail Gillard should stand down for the good of the party.

And the Opposition has been revelling in the row, with Shadow Immigration Minister Scott Morrison yesterday repeating Liberal Leader Tony Abbott's claim that Australia was now led by a dysfunctional Government.


"Arrrhhh mate this is just impossible. I get to the very end, I just... it's .....and tell these d***heads in the embassy to just give me simple sentences ... I mean I've said this before... and tell that bloody interpreter. Arrhh. This f***ing language, just complicates it so much, you know. How can anyone do this. You know what I mean it's just...This is becoming hopeless. Tell him to cancel this meeting at 6 o'clock will you I don't have the f***ing patience to do it...it's just the f***ing Chinese interpreter up there...just f***ing hopeless... I f***ed up the last word.

* "Only a psychopath with a giant ego would line up again after being comprehensively rejected ... Being in government [is] no place for prima donnas who have had their chance."
- Steve Gibbons, Labor MP
* "Julia Gillard can't take the party forward. The community has made its mind up on her. It would be in [Labor's] interest for Julia to stand down. "
- Darren Cheeseman, Labor MP
* "I have been let down by Julia Gillard and I am quite open-minded about a change in leadership."
- Andrew Wilkie, independent MP
* "It's the most devastating move against Ms Gillard's leadership we've seen."
- Neil Evans, Centrebet analyst