The knives are being sharpened....can you hear the mumurings?

Julia Gillard has lost faith of the Labor Party, say senior figures

• Phillip Hudson
• From: No Source
• September 02, 2011 12:00AM

Malaysian swap deal ruled unlawful

SENIOR Government figures say Julia Gillard has "lost her authority" and have urged her to weigh up whether it's in Labor's best interests for her to stay on as PM.

In an extraordinary turn of events, Labor figures who backed Ms Gillard when she replaced Kevin Rudd as Prime Minister just 14 months ago are now floating a plan that could see Mr Rudd return to the leadership, with Stephen Smith as his deputy and Treasurer.

"This is about authority and whether she can assert her authority, because she hasn't got it now," one senior figure said yesterday.

More than 14,000 Herald Sun readers yesterday said Ms Gillard should resign, when asked in a poll.

Just 1318 said she should stay as PM.

They say Ms Gillard would have to voluntarily decide to give up the leadership.

Others in the party say Mr Smith, the Defence Minister, would have the numbers in any ballot and Climate Change Minister Greg Combet could emerge as deputy.

Some say former leader Simon Crean should be given a senior post to win-back support from the business community.

It has exposed a split at the senior levels of the Government as there remains a big chunk of support for Ms Gillard and other senior figures say it would be madness to change leader under any circumstances.But another senior figure said the interests of the ALP and keeping Tony Abbott out of power must come first.

"We need to do what is best for the party and that would be Kevin as leader and Stephen as treasurer," he said "There are serious question marks about her continuing. She has to do what is in the best interests of the party. Everyone needs to set aside their hatred of each other.

"She should be given all the time she needs but if she doesn't pick up then we have to change."With Labor's primary vote at record lows in opinion polls and well below the level when Mr Rudd was removed the ALP is bracing for even lower figures in next round of polls due at the weekend after the High Court sank the Malaysia asylum seeker deal.

One insider suggested the time to have a serious look at the leadership was "late this year or early next year".

"Does she think she can recover as distinct from just toughing it out? If you've got the best interests of the party at heart, it is time to be thinking about it. Was yesterday (the High Court decision) a tipping point - I don't know," he said.

Ms Gillard yesterday said the High Court had missed an opportunity to stop people smugglers.

The PM twice accused Chief Justice Robert French of inconsistency, saying he "considered comparable legal questions when he was a judge of the Federal Court and made different decisions to the one that the High Court made".

Last night Ms Gillard vowed to stare down the backbench revolt.

"The Labor team supports me as the best person to do this job as Prime Minister," she said.

"Of course there will always be discussions within political parties ... Obviously that's the right place to do it, in the party room."

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