Prime Minister Julia Gillard and challenger Kevin Rudd addressed the Labor caucus Monday ahead of a vote on who will lead the nation's ruling party and the country, reports said.

The ballot will determine whether the unpopular Gillard remains as prime minister or whether Rudd reclaims the job he lost in a party-room coup in 2010.

Gillard, Australia's first female leader, is expected to win the party-room vote with a comfortable margin in the 103-member caucus, with last-minute canvassing of MPs giving her two votes for every one of Rudd's.

Rudd was dumped from top office by Gillard in June 2010 after losing the confidence of Labor chiefs following a series of policy mis-steps, and tensions have simmered with Gillard ever since.

He resigned his post as foreign minister in a dramatic press conference in Washington last Wednesday as speculation of a challenge reached fever pitch, and Gillard declared Monday's ballot soon after.

Rudd swept into office on a wave of popular support in 2007 and is still heavily favoured by voters, but party colleagues find him difficult to work with and have complained of an autocratic and high-handed ruling style.