Rudd resignation proves Govt unworthy: Abbott

Opposition Leader Tony Abbott says the resignation of Kevin Rudd as Foreign Affairs Minister confirms that the government is unworthy to continue in office.

“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,” Mr Abbott said in a statement.

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

Mr Abbott said only the coalition can provide the strong and stable government that will address the issues facing our country and restore hope, reward and opportunity for all Australians.

The surprise announcement was made at a press conference in Washington time at 1.20am local time on Wednesday, with Mr Rudd saying he could not continue as foreign minister because he no longer had the confidence of Prime Minister Julia Gillard.

Lower house MP Bob Katter declined to comment, with his office saying he was focused on the Queensland state election.

“In response to inquires regarding the federal Labor leadership, please note that Bob is not one of the crossbenchers who delivered the present government, nor is he interested in the machinations of other parties,” a spokeswoman said.

Key independent MP Tony Windsor said should Mr Rudd become prime minister again, it would most likely lead to an early election.

And if Mr Rudd did try to command a majority on the floor of parliament, he could not rely on Mr Windsor's support.

“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 (a theme park) 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.”

Mr Windsor said the negotiations he and fellow independents Rob Oakeshott and Andrew Wilkie held in 2010 on who should form government were with Julia Gillard and Tony Abbott and no one else.

“If one of those parties wants to suddenly change that and act as though they have a majority in the House of Reps that's fair enough,” he said.

“But they can't count me in on playing that game.”

Mr Windsor said Ms Gillard was doing a good job as Prime Minister and negotiating Labor's legislation through the parliament.

He said changing prime minister was a high risk strategy that would most likely to lead to an early election “which would only advantage the coalition, probably”.

Julia Gillard firmed as favourite to retain the Labor leadership, according to a leading bookmaker.

Online bookmaker sportsbet.com.au put Ms Gillard at $1.33 to win a caucus vote should one go ahead next week following Foreign Minister Kevin Rudd's resignation from the cabinet.

Mr Rudd is the $3.15 outsider, but his odds are expected to shorten as he declares his hand on his return to Australia on Friday.

The coalition is still the $1.30 favourite to win the next federal election with Labor the $3.45 outsider.

Labor senator Doug Cameron said the “faceless men” in the Labor had forced Mr Rudd's resignation and this was “unacceptable”.

“This must just stop within this party,” the senator told ABC television.

He said these were the same faceless men who set about to replace Mr Rudd as prime minister in 2010.

“It's bad for the party, bad for the nation and bad for the government,” he said.

“We just can't afford to have (Opposition Leader) Tony Abbott given a free ride to the prime ministership of this country.”

He did not believe Mr Rudd had been campaigning for his old job.

His advice to Prime Minister Julia Gillard would be for her express her support and confidence in Mr Rudd and try get him back as the foreign minister.

But he doubted this would happen if the faceless men were “pulling the strings”.

Prime Minister Julia Gillard pictured with former Foreign Affairs Minister Kevin Rudd. Picture: AAP

Labor backbencher Andrew Leigh praised Mr Rudd’s work as Foreign Minister but said he would support Ms Gillard if it came to a ballot.

But he did not want to get into “extended speculation” about what might happen next since he had only just heard the news of Mr Rudd’s resignation.

“I do feel it’s important for us as progressives to be talking about policy,” he said.

“It’s the conservative side of politics who wants to drive the notion that politicians are only interested in power plays and themselves.”

Environment and Water Minister Tony Burke did not believe Mr Rudd had enough support in caucus even to bring on a leadership ballot next week.

“The overwhelming support within the parliamentary party is for the prime minister,” he told ABC TV.

“People have talked up (Mr Rudd’s support) in the media and got away with some pretty significant lies to journalists claiming high levels of dissent within the Government.

“What they thought they had as support has actually been peeling away rather than growing.

“I don’t believe Kevin could bring it on.”

He said Ms Gillard was the best person to put up against Opposition leader Tony Abbott.

“We’ve got a parliament that demands people who can negotiate ... to be able to deliver outcomes.

“That is the exact reason that we have Julia Gillard as prime minister now.”

Mr Burke said it had been no secret that Mr Rudd was campaigning to take back the leadership.

But he said most of the front bench thought there was so little support for that kind of undermining that “we believed that it would go away naturally”.

He said Mr Rudd’s resignation speech was not aimed at being constructive, particularly when he claimed there was a counter-campaign being run by “faceless people”.

“It’s a really desperate last ditch argument,” Mr Burke said.

“I would have thought when colleagues have such an overwhelming view, there has to be a point where you stop doing Tony Abbott a favour.”

Environment and Water Minister Tony Burke. Picture: The West Australian

Bruce Hawker, a Labor strategist and backer of Mr Rudd, said he would contest the party's leadership.

“That is just my view about it,” Mr Hawker told Sky News on Wednesday.

"Kevin Rudd is very concerned about the future of the Labor government and the Labor Party, but more importantly what might happen if Tony Abbott become prime minister.”

The former foreign minister was popular in the polls and in the electorate, Mr Hawker said.

He has got real support out in the electorate out there,” he said.

“It is probably much greater in the electorate than it is in the party room at the moment.”

Mr Hawker said backbenchers would consider their self-interest in retaining their seats at the next election when deciding on the Labor leadership.

“When you take everything else away from this equation is whether Kevin Rudd is popular with his colleagues or people get along with him or not,” he said.

“One question any backbencher has to ask himself is who is best to lead us to a win against Tony Abbott, because far too much is at stake for the government and the country if Abbott wins the next election.”

Former Labor Queensland premier Peter Beattie said Mr Rudd did the right thing, he was more concerned about the impact on the Queensland state election.

He said if the state Labor vote continued to haemorrhage, Labor premier Anna Bligh “has no chance”.

“I would hope whatever consideration that Kevin gives, he actually does think about the vote in Queensland and what it means for the future,” he told Sky News.

“There is a federal election in 17 months and whatever happens in Queensland will have an affect on that.”

He said it was up to the federal Labor caucus who they elect if there is a challenge, but that he had never hidden his support for Julia Gillard, “and I don't now”.

However, Queensland Liberal National Party leader Campbell Newman says Mr Rudd's resignation from his role of foreign minister confirms faceless men still run the Labor party.

“Whatever leader, the problem is Labor - the distractions, the scandals, the waste, the taxes and the politics,” Mr Newman said in a statement.

“We need real change to a united party and Queenslanders get to do that on March 24 if they vote for the LNP team.”

Australian Greens leader Bob Brown said Mr Rudd should have made his announcement on Australian soil rather than from nearly 16,000 kilometres away in Washington.

“It strikes me as strange he didn’t make the announcement before he left or wait 36 hours until he came back here to Brisbane to make it here in Australia,” Senator Brown said.

“It is a very important domestic matter.

“It would have been better if he had told Australians on Australian soil.”

Senator Brown said the speculation about the Labor leadership had not taken up his time, while it had been a distraction for the big political parties.

“They should get their mind back on to policy issues pretty quickly,” he said.

He said Australians were sick of the discussion over the Labor leadership.