Prime Minister Kevin Rudd has announced he wants to give Labor Party members a say in deciding who leads the ALP.

Mr Rudd says the full federal ministry agreed to the idea on Monday, and he has called a meeting of all Caucus members for a fortnight's time to approve it.

He says the change would mean the leader would be elected jointly, with votes from party members given a 50 per cent weighting and the elected Labor Caucus making up the other 50 per cent.

Under the Westminster system, the prime minister is not directly elected, but Mr Rudd says the public wants to know that the prime minister who comes to power will serve a full term in government.

"So this rule change is clear: if a leader of the Australian Labor Party takes the party to the election and they are returned to form the government of the nation, that person remains as leader of the party in the government for the duration of that term," he said.

The changes mean leaders cannot be replaced in the way Mr Rudd was in June 2010 - or Julia Gillard last month.

"The reforms I announce today will give more power to everyday members of the Labor Party. They will ensure that power will never again rest in the hands of a factional few," Mr Rudd told reporters in Canberra.

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"Make no mistake, this is the most significant reform to the Australian Labor Party in recent history.

"It is one that should be welcomed by all members of the ALP across the nation, whether you are a long-serving member of Parliament, a loyal hardworking volunteer, a union activist active in our local branches or a student who has just joined Young Labor."

If the rule change is adopted by Caucus, it would mean that a future Labor prime minister could only be deposed if 75 per cent of Caucus wanted a special ballot - currently only 30 per cent is required.

Candidates would need the support of 20 per cent of Caucus to run, and the ballot would take up to 30 days, instead of the lightning fast changes seen in recent years.

Albanese sees benefit for the Labor brand

Deputy Prime Minister Anthony Albanese says the change is also aimed at boosting party membership.

"This is an opportunity to re-engage in Australian politics for all those who are Labor true-believers but have, up to this point, questioned the value of party membership," he said.

"And today we launch a massive recruitment campaign. We want people to be a part of Labor.

"If you support Labor, if you want to be engaged with Labor, we are saying to you, that we want your participation as a member.

"And in return for that you will get a say in who is the leader of the federal parliamentary Labor Party."

Backbencher Andrew Leigh says the rule changes will address the problems caused for reformist governments by opinion polls, which "suck up more and more of the oxygen".

"The real challenge that I think we've seen, and this isn't just in federal Labor, this is also in the federal Coalition and you see it across the states and territories, is that there is so much pressure that opinion polls place on leaders that it makes it difficult to do reforms that involve a period of unpopularity before popularity follows," he said.

Since returning as Prime Minister, Mr Rudd has flagged his intention to address public concern about factionalism and corruption within the ALP.

These proposed rule changes come after Mr Rudd took the rare step of launching a federal ALP intervention into the scandal-plagued NSW branch.

Mr Rudd has demanded the NSW party implement changes within the next 30 days - a process that will be overseen by the ALP national executive.

The changes include a zero-tolerance stance on corruption and a ban on property developers standing as Labor candidates unless they "divest themselves of any major property development interest".

Opposition Leader Tony Abbott told 7.30 that Mr Rudd's announcement was "fake change", and that Labor should call an election so the nation can decide on a leader.

"The first three years of this Government were so bad they sacked the prime minister; the second three years were so bad they sacked the prime minister - now they want another three years," he said.

"What's more, the bloke who's there now wants to change the rules so that he can't be sacked no matter how bad he is."