Former Prime Minister Kevin Rudd, whose supporters were pushing him to challenge current Prime Minister Julia Gillard for the top Australian Labor Party (ALP) post has blinked. He backed out of the leadership ballot on Thursday afternoon.

With no opponents running against her, Ms Gillard retains the leadership post of ALP as well as being prime minister - that is until September 2013 when Australia holds its federal election.

Ms Gillard surprised Parliament when she announced the ALP leadership ballot during question hour following a challenge from senior Labor minister Simon Crean who sought that the deadlock between Ms Gillard and Mr Rudd be settled.

After Ms Gillard run unopposed, caucus returning office Chris Hayes said, "Both were duly elected unopposed and unanimously by the parliamentary caucus.

In turn, Mr Crean said, "I think this puts aside all the instability that's been associated with people's action around the leadership issue and allows us to focus on moving on and talk to the electorate," referring to both Ms Gillard and Deputy Prime Minister and Treasurer Wayne Swan.

After the caucus, Ms Gillard issued a short statement that said she was grateful to Labor members for supporting her and she accepted the position with "a sense of deep humility, and a sense of resolve."

"I never sought office for its own sake. I have only sought office in the interests of our nation," Ms Gillard stressed.

Mr Rudd, who is apparently reeling from his loss in a similar leadership challenge a year ago, said that he is merely honouring his prior commitment not the run for Labor leader unless the majority of members want him to return to his old post.

"Others treat such commitments lightly. I do not," he said.

"I'm here to inform you that these circumstances do not exist and therefore in the absence of any such draft ... I will be adhering absolutely to the commitment I gave to the Australian people and my parliamentary colleagues," Mr Rudd added.

With the results, Mr Crean was fired as Minister for Regional Development and lost his ambition to be deputy prime minister under a Rudd government.

One possible casualty of the leadership challenge is Rudd supporter Joel Fitzgibbon who said he would consider quitting being the chief government whip in the next six weeks after consulting some Labor members.

Opposition leader Tony Abbot, seizing the crack in ALP unity, seized the moment and challenged Labor to hold the election now.

"If the prime minister was concerned about the party, if she was concerned about the country, if she was less concerned about herself and her own survival, there would be an election now," he said.

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