Rudd rolls Gillard

Kevin Rudd is Prime Minister of Australia - again - after beating Julia Gillard a dramatic Labor leadership ballot.

The former Labor leader and Prime Minster - ousted by Ms Gillard in 2010 - won the caucus vote by 57 to 45.

The margin was more decisive than expected.

The turning point came just 20 minutes before the vote when Labor power-broker Bill Shorten threw his support behind Mr Rudd. The Workplace Minister and former union leader backed Ms Gillard through Mr Rudd's 2012 attempt at a spill, and an aborted coup earlier this year.

In calling the vote earlier today, Ms Gillard said it should be on the basis that "If you win, you're Labor leader, if you lose you retire from politics."

She duly quit after the result was announced, and won't run at the next election, scheduled for September 14.

Several of her supporters have resigned their portfolios, including Treasurer Wayne Swan, Communications Minister Senator Stephen Conroy and Midnight Oil singer turned Education Minister Peter Garrett.

Under Ms Gillard, Labor has been polling under 30%. But a Nielsen-Fairfax survey had the party trailing Tony Abbott's Liberal Party by just four points under Mr Rudd's leadership.

The vote came three years and three days after Ms Gillard seized power from Mr Rudd in a caucus spill.

Mr Rudd is tipped to bring the election forward a month to August. With the support of a number of independent MPs hanging in the balance, it is unclear if he will be able to form a minority government.

It should be known by midday Thursday NZ time whether Mr Rudd can form a government.

The final nail in Ms Gillard's political coffin was an ill-judged photo op for the Women's Weekly, in which the Prime Minister sat knitting a stuffed toy kangaroo for the royal baby. 

The photo shoot seemed designed to counteract her handlers' fears the Labor leader had over-played her response to sexist jibes, and now came across as too stridently feminist. But many commentator's felt the PM had over-corrected with the unsubtle PR manoeuvre - skewered by the Daily Telegraph under the headline  "Spins and Needles."

There was no immediate word on whether Ms Gillard will now complete the kangaroo.