Julia Gillard makes national apology over forced adoption policy, as she survives leadership challenge

Julia Gillard remains Australia's prime minister after she threw her job open to a leadership ballot but no one was willing to run against her (Getty Images)

Julia Gillard remains Australia's prime minister after she threw her job open to a leadership ballot but no one was willing to run against her.

Her predecessor Kevin Rudd, who she ousted in an internal party coup in 2010, had been expected to attempt to replace her.

But at the last moment he announced he would not contest the ballot yesterday.

Senior minister Simon Crean had earlier brought leadership unrest to a head by calling on his government colleagues to sign a petition to force a ballot if Ms Gillard refused to call one.

The Labour party faces the growing prospect of a sound election defeat on September 14.

Ms Gillard announced the ballot for her job, and that of Deputy Prime Minister and Treasurer Wayne Swan, on the last day of parliament before a seven-week break.

"I have determined that there will be a ballot for the leadership and deputy leadership of the Labour Party," she told parliament.

Mr Crean - a former Labour leader who is now Minister for the Arts, Regional Australia, Regional Development and Local Government - said he wanted to be deputy leader and called on Mr Rudd to challenge for the top post.

Part of Mr Rudd's appeal is opinion polling that shows he would be a far more popular choice of the public.

He led Labour to victory at elections in 2007 before being deposed, and challenged Ms Gillard last year and was roundly defeated in a ballot of Labour politicians.

"Kevin Rudd in my view has no alternative but to stand for the leadership," Mr Crean said.

However, Mr Rudd took a different view, and Ms Gillard was elected unopposed, although possibly weakened.

The day's dramatic events came after Ms Gillard delivered a historic national apology in parliament to the thousands of unwed mothers who were forced by government policies to give up their babies for adoption over several decades.

More than 800 people, many of them in tears, heard the apology and responded with a standing ovation.

"Today this parliament on behalf of the Australian people takes responsibility and apologises for the policies and practices that forced the separation of mothers from their babies, which created a lifelong legacy of pain and suffering," she told the audience.

"We acknowledge the profound effects of these policies and practices on fathers and we recognise the hurt these actions caused to brothers and sisters, grandparents, partners and extended family members.

"We deplore the shameful practices that denied you, the mothers, your fundamental rights and responsibilities to love and care for your children."

Ms Gillard committed 5 million Australian dollars (£3.3m) to support services for affected families and to help biological families reunite.

A national apology was recommended a year ago by a senate committee that investigated the impacts of the now-discredited policies.

Unwed mothers were pressured, deceived and threatened into giving up their babies from the Second World War until the early 1970s so they could be adopted by married couples, which was perceived to be in the children's best interests, the senate committee report found.