Prime Minister Julia Gillard is bound to enjoy more sleep in the weeks ahead as a new ally was installed as House Speaker on the last day of Parliament session, further boosting her chances of running a full term, experts said.

Elected as new Speaker was Peter Slipper, who prior to his ascension was a Liberal Deputy Speaker, Reuters said, but has quickly announced his intent to resign from the Coalition to turn independent.

The move, described by media reports as a stunning coup for Ms Gillard, suddenly turned the tide for the Labor leader following months of fending off threats to her post due to an eroding popularity, which was compounded by reports of external and internal challenges to her leadership.

Holding a precarious majority in the Parliament, mostly courtesy of independent MPs, analysts believe that Spiller's decision to swing his support in favour of the Labor Party should release Ms Gillard from unnecessary worries while at the same afford her more footing to push for her policies.

"It more likely the government will get through the full term, which lessens political uncertainty at the margin ... and it means they are more likely to get their policies through more easily," Reuters reported Commonwealth Bank senior economist Michael Workman as commenting on the surprising political development.

Previously, the federal government was hampered by spirited opposition launched by the Coalition, which has attempted to block every bit of Ms Gillard's key legislative agenda - among them the controversial mining tax, carbon pricing schemer and her contentious immigration policy.

Analysts are betting that with Slipper's support and with her government gaining three points of majority in the Parliament, Ms Gillard's political fortune should witness dramatic reversals in the months ahead, which earlier this year tethered in the brink of collapse.

Slipper was elected as former Speaker Harry Jenkins opted to resign and effectively give another voting power for his Labor Party, paving the way for a non-voting MP to assume the top House post.

Receiving insults from his former Liberal House colleagues, Spiller announced that he will commence his Speakership role as an independent, hinting as well that in case of a voting tie, Ms Gillard could rely on his support.