KEVIN Rudd looks certain to be ousted as Prime Minister this morning after a stunning coup by Labor powerbrokers to back Julia Gillard as the party leader.

A defiant Mr Rudd held a snap press conference in Parliament last night to announce the Labor Caucus would meet on Thursday morning to resolve the leadership issue.

Ms Gillard told Mr Rudd during tense discussions in the Prime Minister's suite that she would contest the leadership - after a series of factional leaders convinced her to run.

The Prime Minister last night said he was "quite capable" of winning the partyroom ballot. But he has bled support from his Right faction with the powerful Australian Workers Union and other previous backers declaring Labor had no option but to back a new Gillard leadership.

Speaking to reporters last night, Mr Rudd spoke passionately about his Government's achievements - and sent a message to the Labor Left that he would not buckle on the issue of asylum seekers.

"I was elected by the people of Australia. I was elected to do a job," he told reporters, after a three hour meeting in his office with ms Gillard.

"I intend to continue doing that job."

Mr Rudd talked up his Government's efforts in staving off recession.

"Part of that job was to steer this country through the worst economic crisis in 75 years," he said.

But while he spoke confidently to reporters, Labor MPs have turned against the Prime Minister - distressed by internal polling that shows the Government heading for electoral annihilation.

Senior Labor MPs have conceded that the ALP's primary vote has dropped below 30 per cent in some key marginal seats, including on the NSW central coast.

Mr Rudd's expected removal as Prime Minister within a term of being elected would be unprecedented. But it follows a series of backflips and policy slip-ups that have eroded public confidence - and driven Labor MPs to decide that his position was no longer tenable.

It has become apparent to me in the course of the last period of time ... that a number of factional leaders in the Labor party no longer support my leadership," Mr Rudd said.

"That is why it is imperative this matter be resolved.''

The Prime Minister said it was important for the stability of the Government and the party that the matter be resolved.

"It's far better for these things are done quickly rather than being strung out over a period of time,'' Mr Rudd said.

A number of Cabinet Ministers - including Climate Change Minister Penny Wong and Trade Minister Simon Crean - publicly backed Mr Rudd during an extraordinary evening in Canberra.

But that is likely to matter for little when the 108 members of the Labor Caucus gather in Canberra this morning.



Live blog: The Punch on Rudd's leadership woes

Originally published as Defiant Rudd clings on