Resigned Foreign Minister Kevin Rudd said on Friday in a Brisbane press conference that he will challenge Australian Prime Minister Julia Gillard for the leadership of the Australia Labor Party (ALP).He arrived earlier on the same day from Washington.

Mr Rudd, who was ousted by Ms Gillard 18 months ago in a party coup, said he is running against her in the Monday ALP ballot to finish the job that Australians elected him to perform. He admitted the reason he resigned was because he had lost the confidence of the prime minister who accused him of sabotaging the 2010 election and chaotic leadership.

"I believe that to do the best for Australia and Labor, things have to change," said the former prime minister who insisted that Ms Gillard has lost the trust of Australians "rightly or wrongly."

He said he wants to initiate changes in ALP to create a thriving democracy and in response to complaints of Aussies that they are sick and tired of outside forces calling the shots. Mr Rudd said ALP members should be free from intimidation from political factions.

He called on the prime minister to allow candidates for the top ALP post to be given the chance to address the party before the balloting. Ms Gillard has previously stated that she will run on Monday to retain her post, but would become a backbencher if she loses the ballot.

He admitted it was a mistake to remove the right of the party to pick the ministry when he was prime minister. He promised to reverse the policy if he wins the Monday poll.

The party election is expected to divide ALP members as some cabinet members supported Ms Gillard while some, such as Labor strategist Bruce Hawker resigned this week from the campaign of Queensland Premier Anna Bligh to help bring back Mr Rudd to power.

Workplace Minister Bill Shorten said the Monday poll will be a free vote and MPs who would favour the former prime minister would be respected. He said he will support Ms Gillard.

"If MPs are voting for Kevin Rudd, that's fine. If MPs vote for Julia Gillard, that's fine.... What I do know is that each of these individuals will be arriving at these conclusions based on their view of the merits of Julia Gillard's leadership, and whether or not she is the best person to lead the nation," The Australian quoted Mr Shorten.

Climate Change Minister Greg Combet also threw his support behind the present prime minister. He explained that poll popularity is not the only issue that ALP members should consider on Monday but also ensuring party stability in Parliament.

Australian business leaders have spoken against the too much time the ALP party has spent on political bickering which would open the door for Opposition leader Tony Abbott to win. They are wary of an Abbott victory because of his tendency to overpromise just to become Australia's next prime minister.

Mr Rudd said that if he loses on Monday, he will give up his leadership ambitions.

"I would go to the backbench and I will not challenge Julia a second time," he promised.

Ms Gillard is slated to hold a press conference in Melbourne at 3:45 p.m.

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