Gillard says leadership struggle is over

JULIA Gillard has declared the Labor leadership tussle over.

After a tumultuous day on which party elder Simon Crean called for a showdown and was sacked from the ministry, caucus unanimously fell in behind the prime minister and her deputy Wayne Swan.

Mr Crean sought to put an end to months of relentless speculation about a Kevin Rudd comeback by asking Ms Gillard for a leadership spill on Thursday, the final day of parliament before a seven-week break.

He argued the "deadlock" over the Labor leadership could not continue and said he would back Mr Rudd as leader and offer himself as deputy.

He said Mr Rudd - whose leadership style has been criticised in the past - had "changed" in the 13 months since his last failed challenge to Ms Gillard and was now a "more disciplined asset".

After initially rejecting the call, Ms Gillard agreed to declare the leadership positions open after talks with senior government MPs, including Anthony Albanese.

But within minutes of the caucus meeting, Mr Rudd announced he wouldn't stand in the absence of a request from a majority of the party.

"I am here to inform you that those circumstances do not exist," he said, referring to the evident shortfall in support.

As the news spread, Labor MPs were heading into the party room in Parliament House.

Ms Gillard and Mr Swan were returned unopposed as leader and deputy. Ms Gillard thus prevailed for the second time since she rolled Mr Rudd for the leadership in 2010.

While Mr Crean didn't nominate for the deputy's role, he spoke to MPs and called for a return to the Labor values and policy focus of the Hawke-Keating era.

Ms Gillard accepted the caucus endorsement "with a sense of deep humility and a sense of resolve".

"Today the leadership of our political party - the Labor Party - has been settled and settled in the most conclusive fashion possible," she said.

"The whole business is completely at an end."

Mr Rudd's decision had immediate consequences for his supporter, government whip Joel Fitzgibbon, as well as parliamentary secretary Richard Marles.

Mr Fitzgibbon, who is now considering his position, said he backed Mr Rudd because of Labor's primary vote, which is in the low 30 per cent range.

"That's why I took the decision that the party may have a better chance under a different leader," he told reporters.

But he accepted the caucus decision, saying it was now "time for healing".

Mr Marles, who spoke out in favour of Mr Rudd on Thursday, resigned from his role.

Mr Crean was stripped of his arts and regional portfolio.

Mr Rudd called for the party to unite and ensure Opposition Leader Tony Abbott "does not simply walk into the Lodge as if it's his own personal property".

Mr Abbott said the caucus outcome had solved nothing and the tensions would continue.

"The civil war will continue as long as Kevin Rudd and Julia Gillard are in the parliament," he said.

Australia needed strong and stable government to prosper and flourish.

"A house divided against itself cannot stand and that is plainly the case with the current government," Mr Abbott said.

Earlier, he failed to get support in parliament for a "no-confidence" motion against the government, even though independents Tony Windsor, Rob Oakeshott and Andrew Wilkie sided with the coalition.

Mr Wilkie warned that if the "nonsense" continued when parliament returned for the budget on May 14 the minority Labor government risked losing the support of the independents.

Mr Swan said the issue was over.

"This prime minister is a tough leader," he said.

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