Kevin Rudd's chances of winning the Labor leadership ballot have received a major boost with long-time Gillard backer Bill Shorten announcing he has switched his support.
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The Workplace Relations Minister announced his decision less than 30 minutes before the ballot - scheduled for 7pm (AEST) on Wednesday. He said he had informed Prime Minister Julia Gillard of his decision.
"I have now come to the view that Labor stands the best chance to defend the legacies of this term of government ... if Kevin Rudd is our leader," he said.
Mr Shorten - who played a key role in the dumping of Mr Rudd as prime minister in 2010 - has been under sustained pressure in recent weeks to switch his allegiance.
Until tonight, Mr Shorten has maintained his public support for Ms Gillard.
Earlier on Wednesday, a spokesman for Mr Shorten said: "The Minister's position has not changed and he will not be adding to the media speculation on this matter."
Mr Shorten said that if Ms Gillard won the ballot tonight, he would resign his cabinet post.
He said that he believed the best interests of the Labor Party and the nation had to come first.
Mr Shorten said he understood his new position "may come at a personal cost to myself".
Earlier Mr Rudd accepted Ms Gillard's challenge to stand for the Labor leadership, paving the way for a showdown on Wednesday night.
The Prime Minister threw down the gauntlet to Mr Rudd, calling a Labor leadership ballot for 7pm and declaring that whoever loses should quit politics.
Ms Gillard, who announced that she would stand, said that anyone else who believed they should be Labor leader should put themselves forward in the ballot.
"There are no more opportunities, tonight is the night," she told Sky News.
Ms Gillard said if she loses the ballot she will leave Parliament at the September 14 election.
In response, Mr Rudd told reporters in Canberra "for the nation's sake it's time for this matter to be resolved".
"The truth is many, many MPs have requested me for a long, long time to contest the leadership of the party because of the parlous circumstances we now face," he said.
Mr Rudd said he also wanted to respond to the public call for him to stand to prevent Tony Abbott from becoming prime minister.
"It's your voices, the voices of the Australian people ... that have had a huge effect on me more so than most of the voices I happen to hear around the corridors of this building," he said.
Mr Rudd also said if he lost the ballot he will leave politics and not contest the next election - making the same pledge as Ms Gillard.
He said if elected leader, there would be no retributions and no "paybacks" for Labor MPs.
"The truth is, if we're all being perfectly honest about it right now, is that we're on course for a catastrophic defeat unless there is change [of leadership]," Mr Rudd said.
Mr Rudd, who was accompanied to his press conference by his daughter Jessica, did not take questions from reporters.
A key Rudd backer told Fairfax Media that he was confident of 60 votes and growing for the member for Griffith to reclaim his old job.
Out of the 102 member Labor caucus, 52 votes are required to win.
Current Leader of the House and Minister for Infrastructure Anthony Albanese is expected to run as Mr Rudd's deputy.
A pro-Gillard source told Fairfax Media that the contest was very close but conceded that the Prime Minister was a bit behind and would be making calls before the ballot.
It is understand that Workplace Minister Bill Shorten is still supporting Ms Gillard but is not discouraging others who want to change.
Ms Gillard's announcement of a 7pm ballot came after Fairfax Media earlier broke the news on Wednesday that supporters of Mr Rudd were circulating a caucus petition to allow a challenge for the prime ministership.
Ms Gillard did not refer to Mr Rudd during her interview but said she hoped to lead the Labor Party following the ballot.
She said she would not be putting herself forward in Wednesday night's ballot unless she had a "degree of confidence" about her chances of success.
"The important thing is that people keep in their mind as they walk into that room, what's in the best interest for the nation?" she said.
Ms Gillard acknowledged the rumours of a caucus petition but said she had not it.
"There is apparently a petition circulating within the Labor party ... I haven't seen this petition," the Prime Minister observed.
Ms Gillard further cast doubt over the petition's existence, likening it to the Loch Ness Monster.
She said that as a "rational politician" she was aware of how "debilitating" the leadership talk was.
She said that whoever won tonight's ballot they could go to the election leading a united team.
Wednesday night's ballot will be the third Labor leadership ballot since the 2010 federal election.
In February 2012, Mr Rudd challenged Ms Gillard and lost 71 votes to 31.
In March this year, in response to a call from Simon Crean, Ms Gillard called a spill, but she was the only one to contest for the leadership.
Mr Rudd has previously said on many occasions since he challenged Ms Gillard in February 2012 that he would not challenge her again. He has also said that there were no circumstances under which he would return to the Labor leadership.
On Wednesday night, announcing he would stand again, he said: "I do not seek to fudge the fact but I have changed my position. I have simply given you the reasons today that I have done so. I accept full responsibility for my previous statements on the leadership and I will leave it to you, the good people of Australia, to judge whether I have made the right call."
Earlier during question time, Opposition Leader Tony Abbott called on Ms Gillard to move the election date forward to August 3, to solve what he described as "the paralysis gripping her government".
Mr Abbott also tried unsuccessfully to suspend standing orders, arguing that if Labor could not end its ‘‘internal arguments and actually govern the country’’, it should ‘‘restore the selection of the Prime Minister to the people in an election.’’
‘‘Right now in this building no one is interested in the proceedings in this Parliament,’’ Mr Abbott said. ‘‘Everyone is interested in the plotting that is going on inside offices.’’
The vote to suspend standing orders was lost 73 (for) to 74 (against), with Labor supported by key independents Rob Oakeshott and Tony Windsor.
Neither Ms Gillard or any other Labor MPs directly addressed the leadership question during question time.
Mr Rudd arrived late to question time, as did his key backers Alan Griffin and Joel Fitzgibbon.
