Australia's prime minister Julia Gillard put her job on the line, announcing a leadership ballot in hopes of quashing a comeback by the premier she ousted in a Labour Party coup.

But Kevin Rudd's supporters said that even if Ms Gillard survives Monday's vote, the turmoil surrounding her unpopular government will continue until she is out.

Mr Rudd, who resigned as foreign minister during an official visit to the US, told reporters in Washington that he thinks Labour will lose next year's elections if Ms Gillard remains leader, and that government colleagues are encouraging him to run.

But he would not say whether he would challenge Ms Gillard in the leadership ballot of Labour politicians until he returns to Australia tomorrow.

Ms Gillard said she will abandon her leadership ambitions if Labour politicians choose Mr Rudd over her on Monday, and called on Mr Rudd to do the same if he loses.

"We need a leadership ballot to settle this question once and for all," she told reporters.

But Rudd supporters said he would continue to destabilise the government if he lost the ballot and would try to win another ballot at a later date.

A Rudd supporter, Senator Doug Cameron, said a Monday poll would be unfair because Mr Rudd would not have time to canvass support.

"It's clear that some senior ministers are intent on putting a stake through Kevin Rudd's heart and I don't think that's justified," Mr Cameron told Australian Broadcasting Corp television.

Ms Gillard ousted Mr Rudd as prime minister in June 2010 in an internal coup, and their centre-left Labour Party scraped through elections later that year to lead a minority government.

Polls now suggest Labour would suffer a devastating defeat, but Ms Gillard maintains she has her colleagues' support.

Mr Rudd, who was critical of sniping against him within the party, was plainspoken about what he saw as Ms Gillard's dim prospects to win in a national election, and touted his own stewardship while premier of Australia's economy during the global crisis.

"I've had many conversations with caucus colleagues and with ministerial colleagues. I'm very pleased and encouraged by the amount of positive support that encourages me to contest the leadership of the Australian Labour Party," Mr Rudd said.

He said his supporters regarded him as the best prospect to lead the ruling party to victory in the next elections and "to save the country from the ravages of an Abbott government", referring to the current opposition leader, Tony Abbott.

Earlier he had suggested that whatever Ms Gillard's fate is, it will be fairer than his own in 2010.

"I can promise you this: There is no way - no way - that I will ever be party to a stealth attack on a sitting prime minister elected by the people," Mr Rudd said.

"We all know that what happened then was wrong and it must never happen again."

In earlier comments, Mr Rudd left open the option of quitting politics, which would trigger a by-election and could cost Labour its single-seat majority in Parliament.

That would give the conservative opposition coalition the chance to form a new government if it can win the support of independent legislators, or it could force early elections.

In apparent anticipation of a Rudd bid for the party's leadership, Ms Gillard's deputy Wayne Swan issued scathing criticism of the former prime minister.

"For too long, Kevin Rudd has been putting his own self-interest ahead of the interests of the broader Labour movement and the country as a whole, and that needs to stop," he said in a statement.

Labour senior strategist Bruce Hawker said he spoke to Mr Rudd before his announcement and that Mr Rudd is likely to challenge Ms Gillard.

Before Mr Rudd announced his resignation, Ms Gillard had refused to comment on media reports that she intended to fire him as foreign minister for disloyalty.

Mr Rudd then criticised Ms Gillard for failing to defend him from colleagues' criticisms that he was undermining the government through his own leadership ambitions.

Ms Gillard said in a statement that she was taken by surprise by the resignation, and that Mr Rudd had never raised his complaints with her personally.

Many Australians were angry when the government dumped Mr Rudd, who was swept into office as prime minister by general elections in 2007. In Australia's system, the prime minister is chosen by a majority of politicians in the House of Representatives, not by voters.

Labour politicians moved against Mr Rudd in 2010 because opinion polls suggested they were unlikely to win elections that year under his leadership.

After the 2010 elections, Labour under Ms Gillard formed the first minority government in Australia since the Second World War.

Opposition leader Mr Abbott said Mr Rudd's resignation confirmed that the government is unworthy to continue in office.