Australian PM survives leadership challenge

The nation's first female prime minister on Monday retained office after crushing the former leader 71-31 in a secret ballot of the 103 Labor parliamentarians, although only 102 votes were cast with one member absent.

It was among the biggest-ever wins in a Labor leadership ballot after one of the most spiteful campaigns in recent history.

"Australians have had a gutful of seeing us focus on ourselves," Gillard said of the acrimonious row with Rudd.

"Today I want to say to Australians one and all -- this issue, the leadership question, is now determined. I can assure you that this political drama is over."

Gillard called the vote in a bid to end a bitter standoff with her predecessor, whom she dumped as leader in 2010 in a shock party coup, and to settle a period of intense turmoil within Labor.

Rudd came to power in a 2007 election landslide that ended more than a decade of conservative rule, but a series of policy mis-steps saw him lose the confidence of party chiefs and he was axed for the more pragmatic Gillard.

Observers say he never forgave her and he dramatically quit as foreign minister last week before announcing a challenge for the top job, believing only he could save Labor from electoral annihilation in 2013.

A defiant Gillard said she was confident of taking the party to victory next year, despite lagging badly in opinion polls to the conservative opposition led by Tony Abbott.

"I believe that united we can win the next election. I will take Labor to that election and I am confident we can win," she said.

In the wake of his defeat, in which he failed to win over the caucus of Labor lawmakers -- both ministers and backbenchers, Rudd vowed to fully support Gillard.

"To Julia, I accept fully the verdict of the caucus and I dedicate myself to working fully for her re-election as prime minister of Australia," said Rudd, who will now retire to the backbench.

Rudd's reputation has been savaged by senior ministers since his leadership ambitions became clear, but he insisted he bore no ill-feeling.

"I bear no grudges. I bear no-one any malice. And if I have done wrong to anyone in what I have said or what I have done, to them I apologise," he said.

Moving forward, Gillard will almost certainly reshuffle her cabinet after several of her ministers came out in support of Rudd, including Resources Minister Martin Ferguson and Immigration Minister Chris Bowen.

She also has to announce a replacement foreign minister, with Defence Minister Stephen Smith, who preceded Rudd in the portfolio, seen as the favourite.

Despite the resounding defeat, Rudd remains popular outside the caucus with a Newspoll for The Australian, taken over the weekend, showing 53 per cent of voters favour him as prime minister to Gillard's 28 per cent.

He is also far more popular than Abbott, with the poll of 620 people showing 53 per cent think he would be a better prime minister to Abbott's 34 per cent.

Support for Gillard, meanwhile, has declined, with her satisfaction rating falling from 32 per cent to 26 per cent in the past fortnight.

But in a glimmer of hope for Labor, backing for the party is at its highest in 12 months, rising three points to 35 per cent from two weeks ago compared to the conservative coalition, which is steady at 45 per cent.

While Labor has now vowed unity, the poor polling of Gillard saw staunch Rudd supporter, backbencher Doug Cameron, warn of a second leadership challenge within months unless her standing with voters improves.

Other backbenchers and senior party figures downplayed the likelihood of a renewed leadership bid.