Is Kevin Rudd preparing to strike back?

Will the top job be switched between Ms Gillard and Mr Rudd again?

In the ruthless world of Australian politics a battle is being fought between Prime Minister Julia Gillard and the man she ousted in what was described as a spectacular "political assassination."

In June 2010 an emotional Kevin Rudd stepped down after being famously ambushed by his Welsh-born deputy.

"As for serving this government in the future, I will of course serve in any manner in which I can be of assistance," Mr Rudd said at the time.

He returned to the Labor cabinet as foreign minister but the former leader could be on the verge of an audacious attempt to seize back the top job he lost so unexpectedly almost two years ago.

"I wouldn't be surprised if he made a (leadership) challenge. If he comes back as prime minister it would be the most amazing thing I've ever seen in Australian politics," said John Warhurst, emeritus professor of political science at the Australian National University.

'Not the same woman'

Mr Rudd, an ex-diplomat, has deftly avoided making unequivocal public statements on any leadership ambitions he may harbour, but he remains an accomplished politician who swept to power so proudly in November 2007.

Being ousted in his first term as prime minister was a humiliation that supporters of Kevin Rudd want to avenge, although his backers concede he does not yet have sufficient votes to remove Julia Gillard.

But her accident-prone minority government is trailing badly in the opinion polls. As much as some Labor MPs may dislike Mr Rudd and his autocratic style, they may have no choice but to turn to him with an election due next year because of his popularity with voters.

A row over a leak that led to a security breach on Australia Day has hit Ms Gillard

Politics is invariably fickle and while the former leader was removed in large part because of the public's frustration at his failure to introduce an emissions trading scheme, renewed support for the 54-year old Queenslander could now be pivotal.

While Mr Rudd tries to cultivate a caring and trustworthy image, Julia Gillard is often seen as slippery.

John Warhurst said the leadership coup of 2010 "affected Julia Gillard's legitimacy and authority".

"She is certainly not the same woman that she was when she was deputy prime minister. She does seem to have problems being relaxed," he added.

Her critics believe that the introduction of a carbon tax was the ultimate betrayal from a leader who had made a pre-election promise not to slug big polluters with an environmental levy.

More damage was inflicted by an ABC television documentary which reported this week that Julia Gillard's advisers drafted her victory speech a fortnight before she toppled Kevin Rudd back in 2010.

Ms Gillard had always cast herself as a reluctant rival to Kevin Rudd, one who decided to challenge him at the last minute to save the government.

'Fine job'

This year is likely to be a defining one for Australia's Barry-born leader, who despite her troubles continues to show typical Welsh grit.

"I believe Kevin's doing a good job as the minister for foreign affairs and I'm very confident in my leadership of the Labor Party," she asserts. "Do I think we can win the 2013 election? Yes I do."

The conservative opposition in Canberra is revelling in what it calls a "divided and dysfunctional government", and there are clear signs that the Gillard administration is enduring more internal fractures over the leadership.

Labor Senator Doug Cameron insists the party should never have dumped Mr Rudd. "I said at the time I thought it was the wrong move, that Labor would pay a price for the nature of the change."

But loyalist MPs say Julia Gillard is the best person to lead Labor to the next election.

"She is doing a fine job," said parliamentary secretary Richard Marles. "She is governing in what are very difficult circumstances for Australia."

"They're very difficult circumstances for the world. But she is governing in a way which has delivered this country the economy which is the envy of the developed world."

For now, Julia Gillard enjoys the support of the majority of her parliamentary colleagues but is a disgruntled challenger preparing to strike?