Australian Prime Minister Julia Gillard declared yesterday the political drama was over after surviving a leadership challenge from Kevin Rudd, and vowed to re-focus on winning the next election.

I believe that united we can win the next election. I will take Labour to that election and I am confident we can win.

The nation’s first female Prime Minister retained office after crushing the former leader 71-31 in a secret ballot of the 103 Labour parliamentarians, although only 102 votes were cast with one member absent.

It was among the biggest-ever wins in a Labour leadership ballot after one of the most spiteful campaigns in recent history.

“Australians have had a gutful of seeing us focus on ourselves,” Ms Gillard said of the acrimonious row with Mr Rudd.

“Today I want to say to Australians one and all – this issue, the leadership question, is now determined. I can assure you that this political drama is over.”

Ms Gillard called the vote in a bid to end a bitter standoff with her predecessor, whom she dumped as leader in 2010 in a shock party coup, and to settle a period of intense turmoil within Labour. Mr Rudd came to power in a 2007 election landslide that ended more than a decade of conservative rule, but a series of policy missteps saw him lose the confidence of party chiefs and he was axed for the more pragmatic Ms Gillard.

Observers say he never forgave her and dramatically quit as Foreign Minister last week before announcing a challenge for the top job, believing only he could save Labour from electoral annihilation in 2013.

Despite Ms Gillard’s win, analysts said it would be hard for the party to recover from the upheaval.

“I think the government will continue to struggle to get attention back on its policy achievements, its legislative achievements because there will be continued speculation I think about Labour’s electoral chances,” said Rodney Smith, a politics expert from Sydney University.

Nevertheless, a defiant Ms Gillard said she was confident of taking the party to victory next year, despite lagging badly in opinion polls to the conservative opposition led by Tony Abbott.

“I believe that united we can win the next election. I will take Labour to that election and I am confident we can win,” she said.

In the wake of his defeat, in which he failed to win over the caucus of Labour lawmakers (both ministers and backbenchers), Mr Rudd, who is more popular with voters than Ms Gillard, vowed to fully support her.

“To Julia, I accept fully the verdict of the caucus and I dedicate myself to working fully for her re-election as prime minister of Australia,” said Mr Rudd, who will now retire to the backbench.

“I bear no grudges. I bear no one any malice. And if I have done wrong to anyone in what I have said or what I have done, to them I apologise,” he said.

Moving forward, Ms Gillard will almost certainly reshuffle her Cabinet after several of her ministers supported Mr Rudd, including Resources Minister Martin Ferguson and Immigration Minister Chris Bowen.

She also has to announce a replacement foreign minister, as well as an assistant treasurer after right-wing powerbroker Mark Arbib – who was crucial in ousting Mr Rudd in 2010 – resigned yesterday, saying he wanted to give the party a chance for renewal.

While Labour has now vowed unity, the poor polling of Ms Gillard saw staunch Rudd supporter, backbencher Doug Cameron, warn of a second leadership challenge within months unless her standing with voters improves.

Other senior party figures downplayed this likelihood, while business leaders urged the government to get on with creating a more competitive and productive economy.

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