UPDATE 8.10pm More resignations. Joel Fitzgibbon will stand down as chief government whip while Ed Husic and Janelle Saffin are also quitting as government whips.
UPDATE 7.40pm Prime Minister Julia Gillard says her leadership is secure following a caucus meeting where she was unopposed at a spill in caucus.
Kevin Rudd declined to stand for the leadership at the caucus meeting on Thursday afternoon, following several weeks of damaging leadership speculation.
"The leadership has been settled in the most conclusive fashion possible," Ms Gillard told a press conference.
"It has ended now."
The Prime Minister has also accepted the resignation of parliamentary secretary Richard Marles.
Rudd backer and chief whip Joel Fitzgibbon is considering his position.
UPDATE 6.10pm More from Opposition leader Tony Abbott's press conference.
"Nothing is resolved," he told reporters in Canberra.
"The civil war will continue as long as Kevin Rudd and Julia Gillard are in the parliament."
He described the events as a remarkable and bizarre day.
"I want to reassure people that it doesn't have to be this way," he said.
"We are currently let down by a bad government getting worse.
"But that will change."
Mr Abbott said the coalition was ready to deliver its plans for Australia "as soon as we can".
What Australia needed "right now at a difficult time in the life of our nation" was an immediate election.
"We cannot wait until September 14," Mr Abbott said.
"If the prime minister was concerned about the party, if she was concerned about the country, if she was less concerned about herself and her own survival, there would be an election now."
Mr Abbott said Australia's experiment with minority government had failed.
"How long must this circus last?" he asked.
He said Australia was facing budget deficits but Labor continues to focus on itself, even as the next budget was due to be handed down in May.
"This isn't about me," he added.
Australians needed strong and stable government to prosper and flourish, Mr Abbot said.
"A house divided against itself cannot stand and that is plainly the case with the current government."
UPDATE 5.40pm Opposition leader Tony Abbott says minority government is an experiment that has failed, and the 'civil war' will continue in the Labor party.
"Kevin Rudd still stalks Julia Gillard. If things change, Julia Gillard will stalk Kevin Rudd", he said.
UPDATE 5.20pm Prime Minister Julia Gillard has faced the media after standing unopposed for the leadership of her party.
"I accept [the party's] continuing support of me as Prime Minister and Labor leader with a deep sense of humility," the PM said in a press conference in which she refused to take any questions.
"We've got a lot of work to do and we'll continue to do it"
Treasurer and deputy leader Wayne Swan, who was also re-elected unopposed, paid tribute to the Prime Minster.
"If think it's fair to say there was strong support for the Prime Minister in the Party room today", he said. "That's because the Prime Minister is a tough leader."
Mr Swan also implored his party to put the leadership matter behind it and get on with the job of governing the nation.
"If think today does end [the leadership] matter once and for all," he said.
PM SURVIVES DAY OF TURMOIL
Julia Gillard remains as Prime Minister and Labor leader this evening after an expected Kevin Rudd challenge failed to materialise during another extraordinary day in Canberra.
Senior Labor minister Simon Crean triggered the remarkable chain of events earlier in the day after he asked the Prime Minister to call a leadership spill, when he said former Prime Minister Rudd had no option but to run.
Ms Gillard then announced at question time, which commenced at 2pm, there would be a ballot for the leader and deputy leader positions at 4.30pm, saying 'take your best shot'.
There followed a feverish couple of hours of speculation, focusing on whether or not Mr Rudd would actually run.
But Mr Rudd appeared before the cameras just 10 minutes before the expected vote to reveal he would not stand.
That left Ms Gillard as the only candidate for the leadership ballot - and her party still in turmoil.
Opposition Leader Tony Abbott also failed to gain the absolute majority necessary to force a suspension of standing orders to debate a motion of no confidence in the government, just to add to the drama.
Mr Crean had 'pulled the trigger' on leadership speculation, saying it needs to be sorted today, so the party can move on.
However, key independents Tony Windsor and Rob Oakeshott have repeatedly warned their support for the Labor government is dependent on Ms Gillard continuing as Prime Minister.
Earlier this week, Mr Windsor warned a change at the top could see Australians heading to an early pollMs Gillard has faced months of damaging leadership speculation, with polls repeatedly showing the ALP would face a landslide election loss under her leadership.
Mr Rudd, who failed in a leadership bid in February last year, has repeatedly said he would not challenge for the Labor leadership, but left the door open to be drafted by his fellow MPs.
HOW THE DAY UNFOLDED
4.45 Only one person each nominated for the positions of leader and deputy leader of the parliamentary Labor party.
Julia Gillard and Wayne Swan have been re-elected unopposed to their positions.
4.30 Kevin Rudd has announced he will not run for the leadership of the parliamentary Labor party.
Mr Rudd said he made a commitment not to challenge without the overwhelming support of the party - something he does not yet have.
"I made a commitment I would not challenge. While others take those commitments lightly, I do not", he said.
A ballot will still be held for the deputy leadership of the party, Simon Crean and Wayne Swan are expected to stand.
3.55pm Still no word from Kevin Rudd on whether he intends to throw his hat into the ring in this afternoon's leadership spill.
A delegation of Rudd backers has reportedly been to see the former PM to urge him to run.
3.21pm The number crunching has begun ahead of this afternoon's leadership spill.
Treasurer Wayne Swan has tweeted his support for the PM, "@JuliaGillard is as tough as they make them- she'll win today & on 14 Sept because she's got the reforms for the future"
Julia Owens and Kate Lundy have both also used social media to express support in the PM, while recently demoted MP Justine Elliot says she'll 'definitely' vote for Kevin Rudd.
2.42 Opposition Leader Tony Abbott has failed to gain the absolute majority necessary to force a suspension of standing orders to debate a motion of no confidence in the government.
The PM lost the vote 73 - 71, but at least 76 votes (more than half of the House of Representatives) are required to suspend standing orders.
2.35pm Prime Minister Julia Gillard has defended herself and her government after Opposition Leader Tony Abbott called a motion of no confidence in her government.
"Day after day we have made the right decisions", Ms Gillard told parliament, "It is this government that has outlined a roadmap to [the] future of prosperity".
The Prime Minister has also pointed to her efforts on education reform, the National Disability Insurance Scheme and 'sharing the benefits of the mining boom', as reasons to retiain confidence in her government.
"We will fight and fight and fight the opposition leader's campaign to take hope away from the Australian people", she said.
2.10pm Tony Abbott has suspended standing orders in question time to move a motion of no confidence in the government.
"This is a government which has lost its way. Not a good government which has lost its way - a very poor government which has lost its way", a confident looking Mr Abbott told parliament.
"For you party's good, you should go. You should go.", he said.
2pm: The Prime Minister has opened question time by confirming there will be a spill for the leadership of the federal parliamentary Labor party at 4.30pm AEDT this afternoon.
The PM concluded her opening remarks to question time by inviting the opposition to 'take its best shot'.
Simon Crean, the senior minister who instigated the leadership spill, is not present in question time, after the PM confirmed she had sacked him as a minister.
1.30pm: Senior Labor minister Simon Crean has asked the PM to call a leadership spill, and says Kevin Rudd has no option but to run.
Mr Crean has 'pulled the trigger' on leadership speculation, saying it needs to be sorted today, so the party can move on.
"Something must be done to resolve the issue once and for all", Mr Crean said, confirming he would run for the deputy leadership of the party.
"Kevin Rudd has no option, in my view, other than to stand for the leadership", he said.
"I wouldn't be doing this if I didn't believe there was the mood and the need for change in the party", Mr Crean said when asked if Mr Rudd had the numbers to be successful.
Mr Crean said he did not expect the Prime Minister to agree to a spill, but urged caucus to use other mechanisms to force a vote.
Key independents Tony Windsor and Rob Oakeshott have repeatedly warned their support for the Labor government is dependent on Ms Gillard continuing as Prime Minister.
Earlier this week, Mr Windsor warned a change at the top could see Australians heading to an early poll.
Ms Gillard has faced months of damaging leadership speculation, with polls repeatedly showing the ALP would face a landslide election loss under her leadership.Mr Rudd, who failed in a leadership bid in February last year, has repeatedly said he would not challenge for the Labor leadership, but left the door open to be drafted by his fellow MPs.
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