The vote of ruling Labor Party members, known as a leadership spill, came after backers of Rudd circulated a petition calling for a special Caucus meeting to be held on the leadership.
The two leaders agreed ahead of the vote that the loser would quit the party and step down from politics.
Ahead of the vote Gillard said the leadership spill was “in the best interests of the nation and the best interests of the Labor Party”but urged Rudd to quit politics if he lost.
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