Reuters

Australian Prime Minister Julia Gillard addresses the media at the Parliament House courtyard in Adelaide.

Canberra - Australian Prime Minister Julia Gillard has dared her political rival, former foreign minister Kevin Rudd, to challenge her in a leadership vote next week, hoping to end infighting that threatens to sink the minority government and its reform agenda.

Gillard called on Thursday for the vote to be held by ruling-party lawmakers on Monday, gambling that a victory for her would silence Rudd who she accused of trying to destabilise her unpopular government and regain the top job.

The Gillard-Rudd rivalry has been brewing since she replaced him as prime minister in a late-night coup in 2010. It burst into the open on Wednesday when Rudd quit as foreign minister, saying he could no longer work with Gillard and that she could not win the next election, due next year.

“Following Kevin Rudd's resignation yesterday, I have formed this view that we need a leadership ballot in order to settle this question once and for all,” Gillard told reporters, keeping composed and trying to contrast Rudd as a “chaotic” leader.

“For far too long we have seen squabbling within the Labour Party. Australians are rightly sick of this, and they want it brought to an end,” she said.

Gillard said she expected Rudd to stand for the leadership, though he had yet to declare whether he would stand.

A Monday vote limits Rudd's ability to build sufficient support to replace Gillard. Rudd is travelling back to Australia from Washington, where he was on an official visit when he suddenly quit as foreign minister.

The latest crisis has been prompted by poor opinion polls for Gillard's minority government and concerns the party would be decimated at the next election.

Rudd, speaking in a final televised news conference from Washington before boarding a flight home, said he was pleased with the support he had received from his colleagues, and he was being encouraged to run against Gillard.

“I'm very pleased and encouraged by the amount of positive support and encouragement of me to contest the leadership of the Labour Party,” Rudd said.

Opinion polls show Rudd remains more popular with voters although he is not well liked within the government.

Gillard is backed by most of the government's 103 lawmakers, including most senior cabinet members, and Rudd is considered unlikely to have the numbers to mount a successful challenge.

Bookmakers put the odds of a Gillard victory at $1.25 versus $3.75 for Rudd.

There are few policy differences between Gillard and Rudd, with the contest more about who can appeal more to voters.

However, a surprise victory by Rudd could force an early election and change of government, putting at risk the future of key reforms such as a carbon tax and 30 percent tax on coal and iron ore mine profits, both due to start on July 1.

If he wins back the prime ministership, Rudd would need to quickly renegotiate agreements with the Greens and at least two independents to secure a one-seat majority in Australia's hung parliament, or else he could be forced to hold fresh polls.

Opposition Leader Tony Abbott has vowed to scrap the mining tax and carbon tax if he wins power.

Gillard said that if she loses Monday's vote, she would return to the backbench and relinquish all leadership ambitions. She urged Rudd to make the same commitment.

Rudd and his backers now want the vote delayed until March 2 to give him time to speak to colleagues and lay out his plan.

He said the decision for lawmakers should be based on who they believed could best win the next election, and his colleagues believed he was the best candidate.

“They regard me as the best prospect to lead the Labour Party to lead the next election, save the Labour Party at those elections, to save the country from the ravages of an Abbott government,” he said.

“It's about trust, it's also about policy, and about vision.”

Gillard hit back, saying her government had passed major reforms in the past 18 months, while Rudd's time as prime minister between 2007 and mid 2010 was marked by dysfunction, policy paralysis and an inability to pass legislation.

Senior government ministers rallied behind Gillard on Thursday, led by Deputy Prime Minister and Treasurer Wayne Swan, who has cancelled a planned trip to Mexico, where he had been due to attend a G20 finance ministers' meeting.

“I believe there is very strong support for the prime minister,” Swan told Australian radio, adding Rudd was running a stealth campaign to undermine Gillard's leadership.

Other senior ministers also expressed support for Gillard.

“We need to get out of this idea that Kevin is a Messiah who will deliver an election back to us. That is just, I think, fanciful,” Attorney-General Nicola Roxon said.

Rudd backer and Labour Senator Doug Cameron said it would be a travesty of democracy for the vote to be called for Monday, and it should be delayed.

“You can always win any contest you're in, but this is going to be a big task for Kevin Rudd,” Cameron said. - Reuters

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