Australian Prime Minister Kevin Rudd said he would call a leadership ballot on Thursday as disgruntled government members, fearing electoral defeat later this year, seek to replace him with deputy Julia Gillard.
"I believe I am quite capable of winning this ballot tomorrow. I believe there is a strong body of support for the continuation of my leadership," Rudd said on Wednesday after hours of closed-door meetings with Gillard and senior ministers.
Gillard, 48, would become Australia's first female leader if she topples Rudd, but a Gillard government is expected to differ little in substance from one led by Rudd.
A A$52 billion (30.4 billion pounds) stimulus package under Rudd's centre-left Labour government helped Australia avoid recession during the global financial crisis.
Rudd told a news conference Gillard had asked him to call the leadership ballot. Gillard later confirmed she would be candidate in the ballot at 9.00 a.m. (12:00 a.m. British time).
He has been bleeding voter support since April over a series of policy failures.
Rudd's shelving of his climate policy of a carbon trading scheme seriously damaged his leadership credentials and a planned "super profits" mining tax is now worrying voters who are concerned it will damage the economy and risk jobs.
According to opinion polls, he could become the first one-term prime minister since 1932 if he survives the challenge but loses elections expected around October.
"As prime minister of Australia, I was elected to do a job, I intend to continue doing it to my upmost ability," said Rudd.
Rudd said he was proud of his achievements, such as signing the Kyoto Protocol on climate change and apologising to disadvantaged Aborigines.
"We have made mistakes on the way through but in navigating this economy through the worst (financial) crisis the world has seen, and keeping hundreds of thousands of Australians in jobs who would otherwise have been in unemployment queues, of that I am fundamentally proud," Rudd said.
Australian media have speculated for the past few weeks that Gillard may topple Rudd before the elections.
Gillard is a more voter-friendly politician than the bookish Rudd. Her leadership would represent a change of style rather than substance, offering a more consultative approach.
Even if Rudd retains the leadership, his political standing with voters may be seriously damaged as he battles a resurgent conservative opposition led by Tony Abbott, a former university
boxer who also once trained for the Catholic priesthood.