Gillard wins showdown
PM wins 71 to 31.
UPDATE 12.49pm: Julia Gillard has beaten off Kevin Rudd's leadership challenge by a reported 71 votes to 31.
The unofficial result favoured Ms Gillard by more than had been tipped among the 103-member caucus.
Mr Rudd was flanked by 13 supporters as he entered the caucus.He has said he would move to the backbenches if he lost but has not ruled out a further tilt at the leadership at a later date.
The focus now turns to whether Mr Rudd will stay true to pledge to quietly return to the back-benches.
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UPDATE Feb 27, 7am: Prime Minister and Labor Party leader Julia Gillard retains majority support in caucus, according to Australian political pundits.
But former Kevin Rudd was the firm popular favourite in three polls over the weekend; his campaign will be hoping that pragmatic MPs take note (and that they don't remember the polls that lead to Mr Rudd's demise as prime minister).
The ballot of 103 Labor MPs will take place at 10am (12pm New Zealand time).
Senator Stephen Conroy - who has publically backed Ms Gillard - claimed this morning that Mr Rudd had the support of just 29% of MPs.
An intense weekend of lobbying saw Transport Minister Anthony Albanese break-down in tears as he pledged his support to Mr Rudd. Mr Albanese subsequently tendered his resignation to Ms Gillard, who rejected it.
For his part, Mr Rudd has denied claims he told an Adelaide audience last year, "I've been wondering how you [Ms Gillard] reconcile your conservative brand of Catholicism with a childless, atheist, ex-communist as Labor leader."
And while both sites have pledged to accept the result of today's showdown as final, and quietly retreat to the back bench, even ahead of the ballot fears are raised by both camps that the loser will keep up a sniping campaign, with Mr Rudd possibly mounting a fresh challenge if Ms Gillard remains unpopular going into the election (a federal election must be called by November next year).
UPDATE Feb 24: At a press conference in Brisbane at 4.40pm New Zealand time, Kevin Rudd has confirmed he will challenge Australian Labor Party leader and Prime Minister Julia Gillard in a caucus vote Monday.
Mr Rudd called for a "truly secret ballot", in contrast to what he called the Labor party tradition of "looking over people's shoulders."
The former Labor leader devoted a large part of his to a lengthy, campaign speech style attack on opposition leader Tony Abbott.
Mr Rudd said if he lost the leadership vote, he would "return to the backbenches" and not challege the Prime Minister again.
Australian political pundits still predict Ms Gillard will win Monday's contest.
UPDATE Feb 23, 12.30pm: Julia Gillard has used an Adelaide press conference to publicly challenge Kevin Rudd to a leadership vote.
If Mr Rudd accepts, Labor MPs would hold a ballot on Monday.
Insiders say at this point, Gillard has the support of 60 in caucus - comfortably ahead of the 53 needed to win.
The Prime Minister said she would accept Monday's result. She expected to win but added, "“If I do not receive the support of my colleagues I want to make it clear that I will go to the back bench and renounce any leadership ambitions."
Pundits say Ms Gillard is attempting to lock her rival into a one-shot contest.
However, although he has labeled himself the "best prospect" for the ALP, Mr Rudd has yet to commit to the proposed Monday ballot.
The former Prime Minister is currently en route from the US back to Australia.
Rudd: "I'm the best"
UPDATE 11.15am: Kevin Rudd has told a hastily-convened Washington DC press conference that he is "the best prospect to lead the ALP to the next election" and "save" the party.
But despite his campaign-like comments, the former prime minister stopped short of formally challenging Julia Gillard.
Mr Rudd made his comments - around 11am New Zealand time - before boarding a plane to return to Australia.
The former prime minister also used the occasion to attack the Gillard camp, saying "I have been shocked and disappointed by the tone and content of the intensely personal attacks lodged at me overnight. I don't believe these sorts of vicious personal attacks have a place in national affairs."
Ms Gillard is scheduled to hold a press conference in Adelaide shortly.
Rudd quits, likely to challenge Gillard
Australian Foreign Minister Kevin Rudd has resigned, throwing the federal government into a leadership crisis.
He is expected to challenge Prime Minister Julia Gillard as early as next week.
"The truth is I can only serve as foreign minister if I have the confidence of Prime Minister Gillard and her senior ministers," Mr Rudd said in Washington, DC, during a televised news conference.
"There is one overriding question for my caucus colleagues and that is, 'Who is best placed to defeat Tony Abbott at the next election?' "
Pressure has been building on Mr Rudd to act after he was forced this week to deny he was seeking to replace Ms Gillard and after the Australian media reported she was preparing to fire him.
Mr Rudd partly blamed his decision to resign on a senior cabinet colleague, Simon Crean.
"In recent days, Minister Crean and a number of other faceless men have publicly attacked my integrity and therefore my fitness to serve as a minister in the government," Mr Rudd said.
Since originally ousting Mr Rudd from the leadership in mid-2010, Ms Gillard has struggled in opinion polls.
She said she was taken by surprise by his resignation.
"I am disappointed that the concerns Mr Rudd has publicly expressed this evening were never personally raised with me, nor did he contact me to discuss his resignation prior to his decision," she said in a statement.
As prime minister, Mr Rudd had become unpopular with the Labor caucus after a series of policy failures, including a plan to introduce an unpopular mining tax and a decision not to go ahead with a key pledge to implement carbon-emission fees.
Ms Gillard has forced through both policies, despite strong public opposition. Her minority government depends on the support of the Greens and a few independent MPs and senators to maintain its slender majority.
Latest polls show the opposition Liberal-National coalition has a 55% rating, compared with Labor's 45% on a two-party preferred basis.
Australians are next scheduled to vote in a general election in late 2013.