Kevin Rudd has resigned as Foreign Minister, saying he will not be part of Labor's leadership "soap opera" and effectively heading off any move to sack him.

The former prime minister called a late-night press conference in Washington DC to announce his decision and left open the possibility of launching a leadership challenge from the backbench.

"The truth is the Australian people regard this whole affair as little better than a soap opera, and they are right, and under current circumstances I won't be part of it," he said.

He had a pointed message for Labor MPs.

"There is one overriding question for my caucus colleagues, and that is who is best placed to defeat Tony Abbott at the next election.

"Mr Abbott, I believe, does not have the temperament or the experience to ever be elected to hold the high office of prime minister of Australia.

"But at present, and for a long time now, he has been on track just to do that."

Mr Rudd says he will return home to Brisbane on Friday to consult with his family, community and colleagues about his future and announce his intentions before Parliament resumes on Monday.

The former prime minister, who was ousted from the job by Julia Gillard in June 2010, denied he had been plotting a comeback.

"There's no way I would ever be party to a stealth attack on a sitting prime minister elected by the people," he said.

"We all know that what happened then was wrong and it must never happen again."

Mr Rudd says he has had to conclude he no longer has the confidence of the Prime Minister following a string of public "attacks" from senior Gillard supporters.

"When challenged today on these attacks Prime Minister Gillard chose not to repudiate them - I can only reluctantly conclude that she therefore shares these views," he said.

"The simple truth is that I cannot continue to serve as foreign minister if I do not have Prime Minister Gillard's support.

"I therefore believe that the only honourable thing and the only honourable course of action, is for me to resign. And I do so with a genuinely heavy heart and after much personal reflection."

Mr Rudd said the future of the ALP depended on removing the influence of factions within the party.

"I deeply believe that if the Australia Labor Party, a party of which I have been a proud member for more than 30 years, is to have the best future for our nation, then it must change fundamentally its culture and to end the power of faceless men," he said.

Speculation about a possible move by Mr Rudd on the Labor leadership reached new heights at the weekend after the release of a leaked video showing him swearing during his time as prime minister.

Senior ministers including Simon Crean called on Ms Gillard to sack him and end the leadership tensions.

The Prime Minister today brushed aside reports she was preparing to call a leadership spill next week and sack Mr Rudd from the ministry.

But she did not defend Mr Rudd from attacks made against him.

Space to play or pause, M to mute, left and right arrows to seek, up and down arrows for volume. Watch Duration: 2 minutes 25 seconds 2 m 25 s Labor senator shocked by Rudd resignation ( ABC News )

'Unworthy'

Mr Abbott says Mr Rudd has confirmed that the faceless men are running the Labor Party and that the instability at the top of the Government is damaging Australia.

"Kevin Rudd's statement tonight confirms that this government is unworthy to continue in office," he said in a statement.

"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."

Labor Left powerbroker Doug Cameron has come out in support of Mr Rudd, laying the blame for his resignation at the feet of the "faceless men" of the party.

"I'm shocked and I'm extremely disappointed, and this came out of the blue and I think the tearing down of one of our finest foreign ministers by faceless men has to stop," he said.

"It's bad for the party, it's bad for the nation and it's bad for the Government."

Senator Cameron called on Ms Gillard to talk to Mr Rudd and attempt to get him to rescind his resignation.

"I am sure that he's acting in what thinks is the best interests of the party," he said.

"My advice to Julia Gillard would be to express her support and confidence in Kevin Rudd and see if we can get him back as foreign minister... but if the faceless men are pulling the strings then we won't," he said.