Prime Minister Julia Gillard says she will end the Labor Party leadership speculation by calling a leadership ballot on Monday.
'I have decided on 10am (AEDT) Monday morning a ballot for the Labor leadership will be conducted,' Ms Gillard told reporters in Adelaide.
'Following Kevin Rudd's resignation yesterday I have formed the view that we need a leadership ballot in order to settle this question once and for all.'
Ms Gillard said it was in the interest of the Labor party and the nation for the matter to be settled.
'For far too long we have seen squabbling within the Labor party which has obscured the government's achievements and what we are doing to build a stronger and fairer Australia for the future.'
Ms Gillard confirmed she would renominate for the leadership.
'I expect to receive the support of my colleagues when I do so,' she said.
'But let me be very clear about this: if against my expectation I do not receive the support of my colleagues then I will go to the backbench and I will renounce any further ambition for the Labor leadership.
'This would be in the best interests of the government and the nation.'
Ms Gillard called on Mr Rudd to give the same undertaking.
Ms Gillard said she anticipated Mr Rudd would also be a candidate in the leadership ballot.
'I ask him to take the same undertaking that if he does not succeed in this ballot that he will go to the backbench and renounce any further claims to the leadership and act in the interests of the Australian Labor Party and our nation,' she said.
Ms Gillard acknowledged no government was perfect and she had made mistakes in the past 18 months.
'But ultimately the measure of a government is what the government achieves for the Australian people,' she said.
'The measure of a government is not by opinion polls or daily headlines in newspapers.'
A Labor government's driving purpose should be ensuring Australia was stronger and fairer in the future than it was today, Ms Gillard said.
The government needed to build the economy's strength so people could get good jobs and families had security.
'Ultimately under my leadership I believe we have been securing the big reforms that will make us stronger and fairer.'
Ms Gillard told reporters she could lead Labor to victory at the next election.
'I believe we can win the next election and defeat (Opposition Leader) Tony Abbott,' the prime minister said.
'Provided that the Labor party unites and we get on with the job.'
Ms Gillard said government was about more than electioneering.
'It's about having the courage to get the big reforms done.'
Ms Gillard said she had the discipline and personal strength in adversity to stay focused and get things done.
'I have demonstrated those attributes as prime minister,' she said.
'I can always keep going no matter how adverse the circumstances.'
