Kevin Rudd has the fate of the Labor leadership in his hands, with another poll showing support for the Labor Party under Julia Gillard has slipped below 30 per cent for the first time in a year.
The Newspoll, to be published this morning, shows the coalition has opened up a 19-point lead over Labor on the primary vote, 48-29.
It also shows Opposition Leader Tony Abbott has recorded his biggest lead over Ms Gillard as preferred prime minister, 45-33. Ms Gillard's support has fallen two points.
With Parliament entering its final sitting week before the September 14 election, a period referred to as the killing zone, all eyes are now on Mr Rudd.
Speculation is at fever pitch that he will challenge after this second bad poll. A Nielsen poll last week also put Ms Gillard's primary vote at 29 per cent.
Ms Gillard's supporters have declared she will not quit the leadership and have dared Mr Rudd to test his numbers in a ballot. The Rudd camp thinks he would narrowly win, but this falls short of his demand to be drafted by the overwhelming majority of MPs.
One supporter said it was hoped a "bandwagon effect" would convince other caucus members to put aside their personal feelings and vote for Mr Rudd.
The PM's backers made clear a leadership fight would be bloody.
Senate leader Stephen Conroy said he did not believe Ms Gillard would step down.
"If it's to be brought to a head, well Kevin Rudd will have to decide to challenge," he said.
Senator Conroy said, like Peter Garrett, he would not serve on the frontbench if Mr Rudd came back.
Defence Minister Stephen Smith said no one in Cabinet was proposing to ask Ms Gillard to quit.
Immigration Minister Brendan O'Connor called on Labor to unite behind Ms Gillard.
The Prime Minister is staying focused on policy, and will today urge Australians to remain optimistic when she addresses the Committee for Economic Development of Australia think-tank.
She is expected to criticise the "strikingly misguided commentary" about the quarterly national accounts figures released three weeks ago, including suggestions WA was in recession.
She will say the "the most irresponsible pessimists have tossed around the 'r' word" by neglecting facts in the data and ignoring the economy's underlying strength.
A showdown would require either Ms Gillard to call a special party room meeting or a third of caucus to petition for one.