KEVIN Rudd has resigned as Foreign Minister and is considering a possible leadership challenge against Prime Minister Julia Gillard.
Mr Rudd, a former Nambour High student, made his announcement on live television from Washington, saying he could no longer continue his job without the support of the PM.
He said was it was not fair for leadership speculation to continue to play out at a national level while his good friend Queensland Premier Anna Bligh was in the fight of her life for re-election.
The former PM renewed called for reforms in the ALP, saying it was on track to lose at the next election.
Mr Rudd said it was time to change the culture of the ALP so 'faceless men' did not pull the strings.
"Australia ought to be governed by the people, not by the factions."
Mr Rudd said there was no way he would ever be party to a 'stealth attack'' on a sitting PM like he was.
He said Ms Gillard had refused to counter attacks on him from other cabinet ministers.
"I cannot continue to serve as foreign minister if I do not have prime minister Gillard's support," Mr Rudd said.
"The only honourable thing and the only honourable course of action is for me to resign."
Mr Rudd said he would return to Brisbane to consider his future, and would make a full statement on Monday morning.
He said he would consult "openly and honestly" with his family, community and parliamentary colleagues about his next move.
"There is one question for my caucus colleagues - who is best placed to beat Tony Abbott," he said.
Update your news preferences and get the latest news delivered to your inbox.