Australia's Labor roiled by resignations after failed leadership coup

By Rob Taylor

CANBERRA (Reuters) - Australia's Prime Minister Julia Gillard faced a string of ministerial resignations on Friday in the wake of a botched leadership coup against her, forcing a reshuffle of her Labor government just months from potentially disastrous elections.

Resources Minister Martin Ferguson said he would step down, joining departing Cabinet colleagues Simon Crean and Chris Bowen, as well as junior minister Kim Carr. All had backed Gillard's chief rival Kevin Rudd as the party's best hope to reverse polls pointing to a thrashing by conservative opponents at the September 14 elections.

"I have a view it's the only honorable thing to do. I would have voted for Kevin Rudd yesterday and Simon Crean to try and give this party a fresh start," an emotional Ferguson told reporters at parliament in Canberra.

The political unrest in the country threatens to cloud decision making with elections just six months away and as the minority government readies to take leadership of the G20 and after Canberra became a rotating United Nations Security Council member.

Gillard stamped her authority on Labor by being re-elected unopposed after Rudd conceded he did not have the numbers to topple her after a tumultuous day of backroom plotting that will do even more damage to the government's fading popularity.

Treasurer Wayne Swan, widely derided by voters despite having steered the Group of 20 wealthy nations member through the last financial downturn with 5.4 percent unemployment and a 21st year of unbroken economic growth, was re-elected as Gillard's deputy.

Crean was sacked immediately by Gillard on Thursday for backing Rudd in what newspapers called a political "suicide bombing" that appeared to have delivered no gains for Labor except the near-certainty of a thumping election defeat.

TALENT DRAIN

Rudd, a Mandarin-speaking former prime minister ousted by Gillard in 2010 amid another round of plummeting polls, said on Friday he would never again run for the leadership - unless it was already vacant.

"I don't think it's worth raking over the coals. What's done is done and let's get on with the future," Rudd said. "It's really important that we bind together and that's what the Australian people expect of us."

Bowen, one of Rudd's key backers and a former immigration minister, said he would also quit, stripping Gillard's top ranks of another of its most effective political talents.

Ferguson, in particular, had been an influential advocate for the country's mining industry and helped broker a 2010 deal with major resource companies including BHP Billiton and Rio Tinto to abandon a damaging campaign against a mining profits tax introduced by Labor and later watered down.

Gillard, the plain-speaking daughter of Welsh migrants, has consistently failed to arrest a slump in opinion polls, which predict a major defeat in September with Labor losing about 20 seats in the 150-seat parliament.

But she attempted to draw a line under the divisions and concerns about her leadership, extending a press conference at a road construction site north of Sydney on Friday to face down questions from journalists about the government's stability.

"This issue is over and done with. This issue has been resolved for all time, and I think Kevin's statement reflects that," she said.

Gillard said she would make changes to her ministry in coming days, but faced a headache over who to appoint after the departure of some her most effective talents.

"I'm someone who is made of I think pretty strong stuff, and I think that's been on display. Politics is not an easy business," she said.

(Reporting by Rob Taylor; Editing by Ian Geoghegan)

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