The Female Orphan School will be house the Whitlam Institute, the Whitlam Prime Ministerial Library and a public art gallery in honour of the late Margaret Whitlam.

The Female Orphan School will house the Whitlam Institute, the Whitlam Prime Ministerial Library and a public art gallery in honour of the late Margaret Whitlam.

Prime Minister Julia Gillard has announced a $7 million grant to refurbish one of Australia's oldest buildings, which will be used to house the Whitlam Institute, the Whitlam Prime Ministerial Library and a public art gallery named in honour of the late Margaret Whitlam.

Ms Gillard unveiled a plan today to refurbish what the Female Orphan School, set in the grounds of the University of Western Sydney's Parramatta campus.

Ms Gillard said the building - which opened in 1813 and was later used as a psychiatric hospital - was a venerable part of Australian history and was a fitting place to house a tribute to the Whitlam government - Australia's ''own touch of Camelot''.

''This means one of the nation's great stories can be told and retold,'' she said. ''And one of our greatest sons can be always esteemed.''

Mr Whitlam, 95, was unable to attend the event due to his frail state of health.

Ms Gillard said the former Labor leader's 1000 days in office were a ''brilliant transforming moment'' in the nation's social and political evolution.

''He brought a depth of analysis to public affairs grounded as he expressed it in 'the tradition of optimism about the possibility of human improvement and human progress through the means of human reason','' she said.

''They were wise words then just as they are wise words now.''

Ms Gillard said the announcement was designed to commemorate the 40th anniversary of his government, remarking that Mr Whitlam had kept a ''certain grandeur'' while the rancour and pettiness of his opponents paled into ''merited insignificance''.

The library will display a collection of Mr Whitlam's books and papers, accommodate the Whitlam Institute and include a public gallery honouring Margaret Whitlam's lifelong connection with the arts.

UWS vice-chancellor Peter Shergold said the orphan school was the first three-storey building in Australia.

''Here is a chance not just to preserve our heritage but contribute to the public benefit,'' he said.

with AAP

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