Prime Minister Julia Gillard downplayed suggestions that her government is on its way out and her predecessor Kevin Rudd is positioning to reclaim the seat he had lost to Ms Gillard last year.

Speculations of a leadership shake up in Canberra are swirling following the decision handed down this week by the Australian High Court, which bars Ms Gillard from going ahead on her deal with Malaysia that allows for the dumping of asylum seekers to the country, leaving the government without a clear-cut measure on addressing the issue.

Obviously caught off guard by the High Court move, Ms Gillard scored Chief Justice Robert French and called the ruling as an inconsistent policy that would lead to 'missed opportunity' for the Australian government.

Quickly though, Ms Gillard backtracked and sent Attorney-General Robert McClelland to clarify that amidst the frustrations aired by the Prime Minister, her respect for the High Court was not in any way diminished.

Yet the latest political episodes appeared to have highlighted some cracks on the ruling Australian Labour Party as insiders within the party have reportedly confirmed that Ms Gillard would not be staying for too long and Mr Rudd will get another shot on the Labour leadership and secure the Prime Minister post in the process.

Ms Gillard, however, dismissed the rumours and maintained that she has a pretty strong grip on her current position, backed by her effective leadership and economic policies, as she stressed that a single setback will not frustrate her agenda.

"I'm not going anywhere. I'm the best person to do this job. And I'll continue to do it. And what this job is about is leading the nation to a better future," Ms Gillard told ABC during an interview on Friday.

Also, Environment Minister Tony Burke labelled the circulating stories about Ms Gillard's exit as nothing but rumours.

"The next election is two years away. When it comes, the important thing is we've been governing and governing well," Burke was quoted by The Australian as saying.

The publication also cited an unnamed source as saying that "there is no mood for leadership change," in the current government and the idea of another tenure for Mr Rudd is downright 'stupid'.