Media playback is unsupported on your device Media caption Julia Gillard: ''For far too long we have seen squabbling in the Labor Party''

Australian Prime Minister Julia Gillard has announced a ballot for the leadership of the Labor Party amid a bitter tussle with Kevin Rudd.

The move comes hours after Mr Rudd, who was ousted as PM by Ms Gillard in 2010, resigned as foreign minister.

Ms Gillard said she would "go to the backbench" and renounce future bids for the leadership if she failed, and called on him to do the same.

Mr Rudd is on his way back to Brisbane from Washington DC.

Speaking to reporters, Ms Gillard said the ballot would be conducted at 10:00 AEDT on Monday (2300 GMT Sunday).

"We need a leadership ballot to settle this question once and for all," she said, adding that "Australians are rightly sick of this".

She said she anticipated that Mr Rudd ''will also be a candidate in this ballot'', and said she expected to win both the ballot and the next election, due in 2013.

"I am confident that... we can win that election provided we use Monday's opportunity to end this for all time and then we get on with the job of delivering good government for the Australian people," she said.

'Best prospect'

Mr Rudd announced his resignation at a snap news conference late on Tuesday night in the US capital, where he had earlier met US Secretary of State Hillary Clinton.

Image caption Kevin Rudd has suggested that Ms Gillard may not be able to lead Labor to a win in the 2013 elections

He stopped short of confirming that he would be challenging Ms Gillard for the leadership and promised a full statement on his future when he arrived back in Australia on Friday.

But he told reporters just before leaving DC that he had spoken to some colleagues since he announced his resignation and was ''pleased and encouraged by the support'' he had received.

"They regard me as the best prospect to lead the Australian Labor Party successfully to the next elections, to save the Australian Labor Party at those elections, and to save the country from the ravages of an [opposition leader Tony] Abbott government," he said.

He had earlier suggested that Ms Gillard would be unable to lead the Labor party to victory in elections next year.

It remains to be seen who has more support within the Labor Party, says the BBC's correspondent in Sydney, Duncan Kennedy, but the gloves are off.

The vote call comes after weeks of speculation that Mr Rudd's supporters were planning a leadership challenge. Mr Rudd became prime minister in 2007 in a landslide election win, but he was ousted by Julia Gillard, then his deputy, in June 2010.

She then led the party into a general election which saw Australia's first hung parliament in decades. Ms Gillard formed a minority government which relies on independents for a wafer-thin majority, but in recent weeks she has been slipping in opinion polls.

Figures earlier this month put Mr Abbott ahead of her.

Mr Abbott, meanwhile, called the battle "an embarrassment".

"It looks more and more obvious at the moment that this is a great country that is being damaged by a seriously bad government," he said.