Kevin Rudd's first bombshell was to quit as Foreign Minister, but what Mr Rudd will do next still has most people in parliament guessing.

Prime Minister Julia Gillard is now expected to announce a leadership ballot to resolve the leadership war with Kevin Rudd.

Ms Gillard will hold a news conference in Adelaide this morning to set down a caucus vote for Monday.

The latest numbers suggest 35 votes for Kevin Rudd from 103 in caucus as senior ministers line up to criticise Mr Rudd.

Voters could be heading to the polls for an early election if Mr Rudd defeats Ms Gillard with independent MPs warning they would have to reconsider their deal with Labor.

Tony Windsor last night insisted "all bets are off" if Julia Gillard was to come off second best in a leadership spill.

He said a change in leadership could only help Tony Abbott and the Coalition.

"If the Labor Party suddenly want to change arrangements in the middle of the stream all bets are off," Mr Windsor told Sky News.

"I'm not going to place myself in the middle of some sort of Fantasy Glades game that's going on and expect to just keep endorsing people whoever the revolving door produces.

"I did a deal with the current prime minister."

Environment minister and Gillard backer, Tony Burke, told Fairfax Mr Rudd had been campaigning for the job for months and he was "glad" it came to a head.

He claimed Mr Rudd had been campaigning for months and his bid to be Prime Minister again was "the worst kept secret in Canberra".

Political reporter Alex Hart said Prime Minister Julia Gillard now had no choice but to call a spill of the leadership and force Mr Rudd into a fight.

"She had no choice," Mr Hart said.

"The fact remains she has the overwhelming support of the Labor caucus. She may have been forced on to the back foot, but she does have the numbers.

"Her supporters say Mr Rudd's move was one made in desperation. They say he had to do it because his numbers were evaporating."

Mr Rudd himself has sent a direct message to the 103 members of caucus that he, not Ms Gillard, stands the best chance of beating Tony Abbott.

"There is one overriding question for my caucus colleagues and that is who is best placed to defeat Tony Abbott at the next election," Mr Rudd said.

"Mr Abbott, I believe, does not have the temperament or the experience to ever be elected to hold the high office of prime minister of Australia."

"But at present and for a long time now he has been on track just to do that."

Mr Abbott currently stands as a firm favourite to defeat Julia Gillard in an election whenever it is held.

Of the senior ministers, Wayne Swan has been the most scathing of Mr Rudd.

Mr Swan claimed Mr Rudd was putting his self-interest ahead of the party and was "undermining the government at every turn".

"For the sake of the labour movement, the Government and the Australians which it represents, we have refrained from criticism to date," Mr Swan said in a statement.

"However for too long, Kevin Rudd has been putting his own self-interest ahead of the interests of the broader labour movement and the country as a whole, and that needs to stop."

"The Party has given Kevin Rudd all the opportunities in the world and he wasted them with his dysfunctional decision making and his deeply demeaning attitude towards other people including our caucus colleagues."

"He sought to tear down the 2010 campaign, deliberately risking an Abbott Prime Ministership, and now he undermines the Government at every turn."

The division within Labor over the leadership battle has raised questions about the party's ability to govern.

Political commentator Graham Richardson says the war between Julia Gillard and Kevin Rudd has caused irreparable damage.

Anna Bligh, who herself is fighting for a top job as premier of Queensland, said she was pleased Mr Rudd's decision would force the leadership speculation to a head.

"The country has to have this resolved, and I look forward to the federal party resolving it as quickly as they can," she told reporters in north Queensland on Wednesday.

"So frankly I am pleased it will come to a head."

Tony Abbott took no time to fire off his own salvo at the government, saying that Mr Rudd's actions had proved there was a need for change in Parliament.

"Kevin Rudd has confirmed two things - that the faceless men are running the Labor Party and that the instability at the top of this government is damaging our country," he said.

"Kevin Rudd's statement tonight confirms that this government is unworthy to continue in office."

This comes as Kevin Rudd denies claims he asked an MP to speak to Clubs Australia about pokie machine reforms.

"The claims are entirely untrue," a spokesperson for Mr Rudd said in a statement late Wednesday.

"The Foreign Minister has never asked any MP to speak to Clubs Australia at any time on any matter relating to poker machines.

"The Minister would consider the publishing of such a claim as defamation, and would take action accordingly."

The former foreign minister's comments come after the Seven Network aired a statement on Wednesday night by Clubs Australia that claimed the lobby group had met with an MP "close to Kevin Rudd" in November last year.

AAP contacted Clubs Australia late on Wednesday night following the report and was sent a copy of statement.

"Clubs Australia did meet with an MP close to Kevin Rudd in late November which was specifically to discuss the issue of mandatory pre-commitment," Clubs Australia spokesman Jeremy Bath said in the statement.

"It was made clear at that meeting that Kevin Rudd was sympathetic to the concerns of clubs and as Prime Minister he would kill mandatory pre-commitment.

"Clubs Australia was encouraged to continue the campaign and was advised that we should target a select number of MPs.

"Clubs Australia then sought confirmation of Kevin Rudd's support through a known Rudd ally, which we duly received several days later."

In the Seven Network report on Wednesday, Labor backbencher Alan Griffin reportedly confirmed that he had met with Clubs Australia in November, but he denied he was acting on behalf of Mr Rudd.

Mr Griffin reportedly also told the network that he did not mention Mr Rudd during the meeting.

Earlier this week, key independent Andrew Wilkie said he was convinced Kevin Rudd would launch a challenge for the leadership.

"I must confess for a while I thought it was just media mischief right up until I had a 90-minute meeting with Kevin Rudd - Kevin clearly wants the job back," he said.

"There will be a challenge and I suspect he may well be successful, and if he is successful then I will aim to work with him to get the sort of policy outcomes I want to see."