Australian Prime Minister Julia Gillard was on the Gold Coast last night, hoping to rebuild lost support in the nation's working suburbs with a promise to spend A$1 billion on the revitalisation of manufacturing.

"Modern Australia can have a great blue-collar future," she told the Australian Workers Union conference.

But her own future continues to look increasingly doubtful.

A poll yesterday not only confirmed a reversal in the Government's earlier clawback against the Opposition, it also said Opposition leader Tony Abbott had overtaken her as preferred prime minister for the first time in seven months, hewing at one of her key leadership planks.


And the Nielsen poll in Fairfax newspapers further showed that Kevin Rudd, ousted as Prime Minister in Gillard's 2010 coup, remains more popular as Labor leader.

With the rumblings of fear and discontent among Labor MPs already raising the possibility of another Rudd challenge, the trident of bad news makes more urgent Gillard's task of restoring voter confidence.

She hoped to achieve this by calling the election for September 14, giving her more than half a year to pull Labor's shaky house into order, regain control of the political agenda, and turn the heat on Abbott.

So far it has been a disaster: the resignation of senior ministers, fraud charges against former Labor and now independent MP Wayne Thomson, the abandonment of the promised budget surplus, leadership speculation and plunging polls.

Leaks and counter-leaks from rival Gillard and Rudd supporters have painted a dangerous background of a Government at war with itself.

"A Government that doesn't show unity of purpose will fall in the polls,"

Trade Minister Craig Emerson told ABC radio.

Abbott has been sharply redrawing his public persona, backing off his shrill carping at Labor to present a more positive, reasoned face. Nielsen found support for Abbott as preferred prime minister had risen nine percentage points to 49, while Gillard's support slipped five points to 45 per cent.

Ominously, a Galaxy poll at the weekend found that women were now turning against Gillard.

Nielsen also reported that Rudd's lead as preferred Labor leader has increased to 61 per cent against Gillard's 35 per cent.

Although Rudd supporters have said there are no plans at present for a challenge, many backbenchers - especially those in marginal seats - are becoming increasingly concerned at the direction of the polls.

Nielsen joined Newspoll and Morgan in noting a reversal in the trend that had earlier seen Labor within striking distance of the Coalition, finding that the two-party preferred vote that decides Australian elections gave the Opposition 55 per cent, 10 points ahead of Labor. This would give Abbott a landslide.

"It's a wake-up call, isn't it," former leader and Arts and Regional Australia Minister Simon Crean told Fairfax radio. "You can't gild the lily."

If Gillard cannot pull back from the vortex, pressure for a challenge will grow.

Rudd has bluntly dismissed talk of another tilt at the leadership.

"Frankly, it ain't happening."

But while pledging support for Gillard, he has shot back into the spotlight with a regular television slot, public commentary, and criticism of Gillard's failed reworking of his original mining tax.

Gillard remained stoic: "If I spent my time worrying about and commentating on opinion polls, then I wouldn't have time to get my job done."