"I will be happily leading Labour to the next election," Gillard, Australia's first woman Prime Minister said reacting to reports of government whip Joel Fitzgibbon switching sides to the Rudd camp.
The news comes in backdrop of a growing negative sentiment against Gillard, that is said to have been fueled by government's recent decision to allow mining magnate Gina Rinehart to import of 1700 foreign workers for mining activities.
Although Gillard, who will be facing a Labour caucus on Tuesday over her government's deal, has tried to ally fears by asserting that she will "make sure Aussies get jobs first", the episode has exposed growing tensions at party's top level, the Sydney Morning Herald reported.
The media report said Gillard has expressed her anger about the deal, something which reveals a rift with Immigration Minister Chris Bowen and Resources Minister Martin Ferguson, the leaders who backed of Rudd in February's leadership vote.
Gillard and then foreign minister Rudd faced off against each other in a party room vote in February, with the Prime Minister crushing her former boss 71 to 31 and Rudd going to the backbench.
The handling of the issue by the Prime Minister, however, has raised many eyebrows, with even some loyalists said to be unhappy with her.
Gillard did not endorse the deal openly, but was of the view that there would be a need for some foreign workers to cater over half a trillion dollars of investment projects that are in the pipeline, the media report said.
