REUTERS

Australia's Prime Minister Julia Gillard.

Canberra - Senior Australian government ministers denied a political challenge against Prime Minister Julia Gillard could be imminent after a newspaper on Thursday said former leader Kevin Rudd was being urged to move against her within weeks.

The Daily Telegraph cited sources within the ruling Labor Party as saying that there had been a slide in support for the embattled Gillard, who is in France for a meeting of leaders from the Group of 20 major economies.

But Rudd, around whom leadership speculation has swirled for weeks, said he was not considering a challenge to Gillard and was happy to remain foreign minister.

“As I've said one thousand times before, I'm very, very happy being the foreign minister. That hasn't changed and won't change,” Rudd told reporters at parliament.

The Daily Telegraph said Labor figures backing Rudd to take back the job, which he lost to Gillard in a party coup last June, had confirmed the former diplomat was being told by close confidants to challenge Gillard as soon as this month.

“There are three certainties: There is a leadership challenge under way, Rudd doesn't have a majority yet but has enough numbers to be a contender, and they are strategising about how to get it done,” the mass-selling paper quoted one unnamed Labor figure as saying.

Gillard, in the top job for barely a year, has been under pressure from the opposition over her plans for new carbon and mining taxes and for dealing with asylum seekers, with polls showing her minority government's popularity near record lows.

Communications Minister and senior Cabinet member Stephen Conroy dismissed the report and accused the News Corp-owned paper of bias against the minority government. The Daily Telegraph is a major Australian tabloid.

“(The Daily Telegraph) is clearly campaigning against the Gillard government and the Labor government in general, and you should buy the Daily Telegraph just to read the sport section,” Conroy told local television.

Conroy has previously accused the Daily Telegraph of campaigning for “regime change” and said that the news report was “stretching credibility”, as it had not claimed its coup source was even a Labor politician.

Another senior Labor figure, Parliamentary Secretary for Aid Richard Marles, also said there had been no approaches about his backing for a leadership challenge.

“That paper will have a much more functional use tomorrow when it is wrapping fish and chips,” Marles said.

Senior Labor faction leader Senator Doug Cameron, whose leftist faction is opposed to Rudd's right wing group, branded Rupert Murdoch's Australian arm News Limited and the Daily Telegraph as “a threat to democracy”.

Gillard's one-seat government faces a series of crucial parliamentary votes this month ahead of elections due in 2013.

An Essential Media poll this week put support for Labor at 45 percent against 55 percent for the opposition conservatives, which if it continued to the election would see Labor swept away with the loss of 22 seats in the 150-seat parliament.

Some political analysts close to ruling Labor have predicted any move against Gillard is unlikely until at least early 2012, after the passage of the key carbon and mining tax laws, giving disgruntled voters time to change their minds.

Former Labor leader Mark Latham said if there was an early strike against Gillard amid falling polls, as the Telegraph was suggesting, support would likely fall behind Defence Minister Stephen Smith, rather than the polarising figure of Rudd.

Smith also sought to shut down speculation, which threatened to overshadow Gillard's G20 trip and fuel widespread voter perceptions at home of her government as weak and vulnerable to the demands of Green and independent allies.

“I have said repeatedly, I strongly support the prime minister and I'm very happy doing my job,” Smith said. “There is not going to be a vacancy.” - Reuters