Leadership battle looms as Rudd ambitions revealed

Julia Gillard and Kevin Rudd will face off in a leadership battle as early as next week after supporters from both camps conceded a showdown was now unavoidable.

Backers of the Prime Minister and her predecessor concede that the leadership tension between the two has become so destabilising that it is affecting the operation of Government.

Ms Gillard thinks she would win a leadership ballot, perhaps as early as next Monday, but it may not be enough to halt the momentum of the Foreign Affairs Minister.

Former Queensland Labor premier Peter Beattie says PM Julia Gillard should call a ballot next week.

Senior minister Simon Crean said this morning the Prime Minister must confront Mr Rudd over the leadership issue.

Ms Gillard told a press conference this morning she had the strong support of her ALP colleagues.

Mr Rudd is understood to believe he could resign to the backbench and challenge again later in the year in what would be a repeat of Paul Keating's two-step challenge against Bob Hawke.

Mr Rudd's hand was strengthened at the weekend after a video of the then prime minister swearing and ranting at staff was anonymously uploaded to the YouTube website.

The clip is thought to have come out of the Department of Prime Minister and Cabinet. If the aim was to hurt Mr Rudd, it had the opposite effect within the Labor Party.

Key independent Andrew Wilkie initially said he had talked to Mr Rudd about a possible leadership transition in November, before backtracking on those comments later today.

Former Labor powerbroker Graeme Richardson said today he was staggered Ms Gillard has not sacked Mr Rudd for instigating a leadership challenge.

In a television interview recorded late on Saturday before he left for a meeting of G20 foreign ministers, Mr Rudd delivered a clear message to ALP backbenchers that he had sought to tone down his notorious work ethic and tendency towards micromanagement.

"The bottom line is I think you do learn and what I've tried to learn from all of that is: do less in a given working day, rather than trying to do everything," he said.

"I think it's also important to delegate more and be sort of happy and contented about that and, on top of that, most importantly, consult more broadly as well."

Mr Rudd did the interview because of the YouTube clip, before flying out for a series of meetings, starting with the G20 gathering in Mexico, that will keep him out of the country until next weekend.

The ALP caucus is next due to meet on February 28. The tensions between Ms Gillard and Mr Rudd are expected to come to a head at that meeting.

Ms Gillard denied her office had anything to do with the edited clip.

"My office did not have access to the material people have seen on YouTube," she said.

"I don't know who put that material on YouTube, but whoever did it has acted inappropriately."

Suspicion over who uploaded the clip has settled on a disgruntled public servant in the Department of Prime Minister and Cabinet who had to deal with Mr Rudd during his days as prime minister.

Ms Gillard was not helped by comments from backbencher Darren Cheeseman, who holds the party's most marginal electorate of Corangamite, who said it was in the ALP's interest for her to resign.

"Julia Gillard cannot take us to an election," he said. "She will decimate the party if she does."

But Ms Gillard was defended by another Victorian MP Steve Gibbons, who took to Twitter to describe Mr Rudd as a "psychopath".

"Only a psychopath with a giant ego would line up again after being comprehensively rejected by the overwhelming majority of colleagues," he said.

A switch to Mr Rudd could improve the ALP's numbers in the House, with Mr Wilkie saying he preferred Mr Rudd to Ms Gillard.

He believes a challenge between the rivals will happen.

"For a while I thought it was media mischief until I had a 90-minute meeting with Kevin Rudd. Kevin clearly wants the job back," Mr Wilkie said.