Foreign Affairs Minister Kevin Rudd says Labor risks becoming the third wheel of Australian politics unless it moves to undermine powerful factions within the party.

Outlining his plans for sweeping reform within the ALP ahead of next weekend's national conference, Mr Rudd called for the party's 35,000-strong branch membership to directly elect the national executive and its secretary, as well as directly elect all delegates to the ALP national conference.

Mr Rudd's proposals go further than the changes recommended by a post-election review by the party's elder statesmen, and they are also more radical than changes Prime Minister Julia Gillard has proposed for discussion at the national conference.

But the former prime minister told Sky News factions are running rampant and the party risks fading away if nothing is done to curb their power.

"We need to be the party of the reforming centre of Australian politics," he said.

"The party of working people, the party of small business, the party of nation-building, the party for the future.

"We have that in our DNA, but I think our organisational structure pulls us away from that.

"[What is needed is] a net transfer of power away from the factions to all those folk who go out and do the hard work for us come election time."

Federal Opposition Leader Tony Abbott says Mr Rudd's call for structural changes to the Labor Party is an attack on Prime Minister Julia Gillard's leadership.

"Kevin Rudd is particularly conscious of the role that the faceless men have played, first in his own political execution, and just this week in the political execution of a good Speaker but it's a pretty savage attack by the Foreign Minister on the Prime Minister," Mr Abbott said.

But Mr Rudd says the ALP will fade to minor-party status unless structural changes are made.

"Unless we undertake some serious organisational surgery, [the risk is] that we end up being a third party in Australian politics," he said.

"How do you address a core problem? That is, how do you take control of the Australian Labor Party back from the factions and deliver it to the 35,000 members of the Australian Labor Party? Because those members have been leaving in droves."

Labor's future

Speaking at a book launch on Saturday, Mr Rudd outlined his concerns for the party's future.

"There is a real danger that we simply fade away as other progressive parties around the world have done, becoming a shadow of their former selves against the aggressive conservative onslaught of a resurgent right."

"We are fools if we do not understand that the public has had a gutful of what currently passes for much of our national political debate," he said.

Queensland Premier Anna Bligh backed Mr Rudd, saying while the development of factions is normal, it is time to modernise and democratise the ALP.

"What's not acceptable is when those organisations within organisations - call them factions or anything else - become so entrenched and so removed from the other members of the group that it becomes unhealthy, and I think we are bordering on that and it's time for us to bite the bullet," she said.

"I endorse the comments by both John Faulkner in his review and recently Kevin Rudd. I look forward to a vigorous debate at party conference and [a] party that comes out of that conference stronger and a party ready for the challenges of this century."

ABC/AAP