The fate of Julia Gillard as Labor leader was discussed in passing during the Tuesday meeting of union leaders in Melbourne this week, according to a report by Fairfax Media today.

Citing an unidentified power broker within Labor, The National Times said that union leaders from ACTU, AWU, CFMEU and other factional bosses chatted about the likelihood of Kevin Rudd returning soon as Labor's top man and prime minister.

"The idea of Kevin Rudd, or even someone else, taking over as leader was discussed in the context that it might trigger an early election and we would need to work out strategies for our campaign in the event," the Fairfax publication quoted its source as saying.

The report confirmed claims by The Australian Financial Review (AFR) that labour unions could be shifting away from Prime Minister Julia Gillard, whose popularity continue to sag despite claims the Labor-led government that a surge on her poll numbers will be seen shortly after the carbon compensations have been delivered.

However, both ACTU chief Dave Oliver and AWU boss Paul Howes flatly dismissed the AFR report as untrue.

In an interview with ABC, Mr Oliver stressed that the Gillard government has so far embraced policies that were agreeable to labour groups "in regard to jobs and supporting low-income families and protecting working conditions."

"The movement is supportive of Prime Minister Gillard and her government for the work that is being done on the issues that matter to us most," he stressed.

On his part, Mr Howes brushed aside the new rounds of speculations questioning the leadership tenure of Ms Gillard in ALP by taking on to Twitter.

"All unions are united in supporting the PM," he declared.

Also, Deputy Prime Minister Wayne Swan told reporters today in Cairns that the reports were again untrue.

"Those reports aren't worth the paper they're written on," the treasurer was quoted by the Australian Associated Press (AAP) as saying.

The reports came out as Greg Rudd, brother of the former prime minister, said on Thursday that by February 2013, Ms Gillard will be out of her post and Labor will again court Mr Rudd to lead the party anew come the 2013 election.

The other Rudd himself will run for the Senate as independent, hinting that he would not hinge his political ambition on Labor, which he described as a 'dead meat'.

He clarified too that the former PM would not launch a challenge against Ms Gillard but "he'll definitely take it if they (Labor) ask."

"They'll make the decision over Christmas. And Kevin is the only alternative," he declared.

Part of his statements were in line with the recent pronouncements of Kevin Rudd's wife, Therese Rein, who said earlier this month that her husband has no active plans to return to his old post but may do so for "national good."