Foreign Minister Kevid Rudd has announced his resignation at a press conference in Washington DC at 1.20am local time, 5.20pm AEDT.
Mr Rudd he believed he no longer had the support of the Prime Minister, Julia Gillard and had no option but to resign.
‘‘I cannot continue to serve as foreign minister if I do not have the Prime Minister’s support and so I have decided to do the honourable thing and the honourable thing is to resign.’’
He said the reign of ‘‘faceless men’’ and their iron grip on the control of the Labor leadership must end.
He called the leadership brawl a "soap opera" and said he would not have "anything to do with it".
Mr Rudd said the ‘‘ongoing saga’’ was damaging the business community and ‘‘my good friend Anna Bligh’’ who is contesting the Queensland election.
"I feel very uncomfortable doing this from Washington rather than in Australia but I don’t feel I have a choice,’’ Mr Rudd said.
He said he would return to Brisbane tomorrow and will consult his family and electorate before deciding what his political future is before Parliament returns on Monday.
‘‘There is no way I will ever be party to a stealth attack on a sitting prime minister who was elected by the people.’’
He said the Prime Minister's failure to repudiate Simon Crean and other cabinet ministers' attacks on him throughout the week had been central to his decision to resign as Foreign Minister.
Mr Rudd took aim at Ms Gillard’s poor standing in the polls.
AAP reports: Mr Rudd said there had been some "similar factors at play" in June 2010 when he lost the prime ministership.
"It's time for some plain speaking on this," he said.
"The truth is I can only serve as foreign minister if I have the confidence of Prime Minister Gillard and her senior ministers.
"In recent days Mr [Simon] Crean and a number of other faceless men have publicly attacked my integrity and therefore my fitness to serve as a minister in the government.
"When challenged today on these attacks Prime Minister Gillard chose not to repudiate them.
"I can only reluctantly conclude that she therefore shares these views."
‘‘There is one overriding question for my colleagues and that is who is best placed to defeat Tony Abbott,’’ he said.
‘‘Tony Abbott is on track to win and has been for a long time.’’
Mr Rudd said he was sad to leave the office.
"The simple truth is I cannot continue to serve as foreign minister if I do not have Prime Minister Gillard's support," he said.
"I therefore believe the only honourable thing, and the only honourable course of action, is for me to resign."
Australia must be governed by the people, not party factions, Mr Rudd said.
"I promise you this - there is no way, no way, that I will ever be part of a stealth attack on a sitting prime minister elected by the people," he said.
"We all know that what happened then was wrong and it must never happen again."
Interesting times ahead: Bligh
Premier Anna Bligh said from her campaign bus: “Well I said earlier this week that this needed to be resolved. I presume that this decision will actually bring this matter to a head. I think for the sake of the country it has to be resolved, certainly for Queensland and for this campaign it’s important.
“I note that Kevin says he understands that this whole issue has not been good for this campaign. He’s right about that. I share his views and I’m glad to see it being brought to a head.’’
“Kevin Rudd and I have been friends for a very long time. He’s my local federal member. He’s a great member of Parliament. I guess we’re in for some pretty interesting times ahead.’’
Opposition Leader Tony Abbott was quick to respond to the unrecendented mover by the Foreign Minister.
"Kevin Rudd has confirmed two things – that the faceless men are running the Labor Party and that the instability at the top of this government is damaging our country," he said.
"Kevin Rudd’s statement tonight confirms that this government is unworthy to continue in office."
Emerson to act as Foreign Minister
Craig Emerson will act as Australia's Foreign Minister.
Mr Emerson, presently the Trade Minister, will take on Foreign Affairs responsibility immediately.
But a senior Labor source said decision on a permanent replacement for Mr Rudd was not expected for some time.
The Prime Minister now must decide whether to reshuffle her front bench as anticipation builds that Mr Rudd will challenge for the top job.