Three years after being knifed by Julia Gillard, Kevin Rudd gets revenge and returns as Australian Prime Minister

In an extraordinary turnaround in political fortunes, Australia's former prime minister, Kevin Rudd, wrestled the top job back today from Julia Gillard, who ousted him nearly three years ago to the day.

Mr Rudd, who was publicly tearful after being deposed in June 2010 and since then has plotted almost incessantly to regain office, was expected to be sworn in as prime minister tomorrow morning by the Australian Governor-General, Quentin Bryce, after Ms Gillard, 51, formally resigned tonight.

In a piquant twist, Ms Bryce's son-in-law, Bill Shorten, played a pivotal role in the downfall of Australia's first female leader. An influential figure in Ms Gillard's Labor Party and prime mover in the 2010 coup, Mr Shorten publicly switched support to Mr Rudd 20 minutes before Labor politicians voted in a leadership ballot.

Once close colleagues, Mr Rudd and his former deputy had become sworn political foes. Although their enmity remained largely unspoken, Gillard loyalists had denounced him as "dysfunctional", "deeply flawed" and "a psychopath with a giant ego".

Such quotes have been seized on by the conservative Liberal Party, and are already being aired in TV advertisements which are expected to be frequently replayed in the run-up to an election later this year.

Today's dramatic events lanced the boil which had been festering at the heart of Australian politics since Welsh-born Ms Gillard became prime minister. After the ballot, which Mr Rudd won by 57 votes to 45, an at times emotional Ms Gillard said she would retire from politics at the election.

It was poor polls which led to the 55-year-old Queenslander being knifed during his first term in office - an unprecedented event in Australia. And it was even poorer polls that led to a second sitting prime minister being dumped, amid predictions of the biggest landslide defeat for Labor for generations.

Mr Rudd - who may bring forward the election, set for 14 September - enjoyed widespread popularity after he was elected in 2007, ending 11 years of conservative rule. His ratings plummeted after he announced a new tax on wealthy mining companies, and abandoned an emissions trading scheme.

After he was unseated, the public took to him again, and polls have consistently shown that Labor would fare much better with him at the helm. However, it is doubtful whether he can actually win the election, rather than just saving seats. One commentator compared the leadership change to "putting a new collar on a three-legged dog".

Tonight, Mr Rudd - a former diplomat and fluent Mandarin speaker - was conciliatory, praising Ms Gillard as "a woman of extraordinary intelligence, great strength and great energy". He also promised there would be "no retribution, no paybacks", and said he intended to "lead a government that brings people together".

For her part, Ms Gillard said she was proud of her government's achievements, which include major health and education reforms, taxing big polluters for carbon emissions, introducing a disability insurance scheme and setting up a royal commission into child abuse in the Catholic Church and other institutions.

Mr Rudd - who lost a previous leadership challenge last year - is expected to unveil new policies in the coming days, likely to include changes to the widely disliked carbon tax and measures to stop the flow of asylum-seeker boats reaching Australian shores.

But he inherits a minority government and a divided party, with nearly half of his parliamentary colleagues still opposed to his leadership. Today saw an exodus of senior ministers, includng the Treasurer, Wayne Swan.

The great paradox is that while Mr Rudd is popular with voters, he is loathed by many colleagues, as well as by civil servants in Canberra, who have been dreading his return. A smiley, folksy personality in public, he is said to be foul-tempered, despotic and terminally indecisive by those who have worked with him.

What Ms Gillard will do now remains to be seen. She may return to her former profession: the law. Noting today that her great-niece is expecting a baby in July, she said she looked forward to being "the most meddlesome great-aunt in Australian history".