The dramatic move comes as the government tries to head off a catastrophic defeat at elections due within three months.

The return of Rudd could now see Australia go to an election in August rather than the set date of September 14, to cash in on his greater popularity with voters and an expected honeymoon period with the electorate.

Rudd, a former diplomat who speaks Mandarin, won a Labor Party ballot with 57 votes to Gillard's 45. Gillard promised to quit politics if she lost the ballot.