A sudden revolt within Australia's ruling party has given the country its first female prime minister.
Julia Gillard had been deputy to Prime Minister Kevin Rudd since their Labor Party swept to power in a landslide election victory in 2007.
In a sudden move that took many government lawmakers by surprise, she challenged Rudd late on Wednesday to hold a leadership ballot only a month away from an election expected this year.
The PM acknowledged that the party's factional power brokers had lost faith in him and did not contest the leadership at a party meeting on Thursday, leaving Gillard to be elected unopposed.
"I asked my colleagues to make a leadership change ... because I believed that a good government was losing its way," Gillard told reporters.
"And because I believe fundamentally that the basic education and health services that Australians rely on, and their decent treatment at work, are at risk at the next election," she said.
Gillard was later sworn into office on Thursday by Australia's first woman Governor-General, Quentin Bryce, within hours of the ballot.
Her new deputy prime minister, Wayne Swan, retains his key financial portfolio as treasurer and will fly to Canada on Friday for a summit of Group of 20 major economies in Rudd's place. He was also elected unopposed.
An emotional Rudd, flanked by his wife and three children, gave his final speech in the prime minister's courtyard at Parliament House, during which he rated keeping Australia out of recession at the top of his list of achievements during his short tenure.
"I was elected by the Australian people as prime minister of this country to bring back a fair go for all Australians, and I have given my absolute best to do that," the outgoing leader said. He said he would contest the next election and continue to serve his party.
Rudd had ridden high in opinion polls as one of the most popular Australian prime ministers of modern times until he made major policy backflips, including a decision in April to shelve plans to make Australia's worst polluters pay for their carbon gas emissions.
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