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Howes lashes out at senior Labor 'sources' -

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TONY JONES, PRESENTER: Just as the Government sought to close ranks after almost a week of speculation about Julia Gillard's leadership, one of her supporters has reopened hostilities.

Key factional player Paul Howes has angrily warned off Kevin Rudd supporters from undermining the Prime Minister in an expletive-laden verbal spray.

Political correspondent Tom Iggulden has more from Canberra.

TOM IGGULDEN, REPORTER: The Government's fought hard to move on from Monday's dispiriting poll numbers, but cracks are still appearing in the show of unity for the Prime Minister.

PAUL HOWES, NATIONAL SECRETARY, AWU: Nothing upsets me more lately than opening newspapers on a daily or weekly basis and reading anonymous quotes from "senior Labor sources".

TOM IGGULDEN: Kevin Rudd's supporters have been publicly hosing down talk of a comeback all week, but that hasn't convinced Julia Gillard's key factional backer.

PAUL HOWES: Underminding (sic) our prime minister. Underminding the leadership of our movement and this country. What a bunch of gutless p****s they are that they can't put their names to what they are saying.

(Applause from audience)

JOEL FITZGIBBON, LABOR BACKBENCHER: There has been plenty of chatter through the media, at union conferences.

TOM IGGULDEN: A key member of the Rudd camp shot back tonight, ramping up the pressure on Wayne Swan ahead of May's budget.

JOEL FITZGIBBON: And that will be the Treasurer's best opportunity to redraft the message, redraft the plan.

TOM IGGULDEN: But Mr Fitzgibbon says a leadership change isn't being contemplated.

JOEL FITZGIBBON: If we don't get a bounce out in the budget, we'll be still in strife. But I'm hoping we do get a bounce out of the budget.

DAVID SPEERS, SKY NEWS PRESENTER: But would you at that point - if you don't get a bounce out of the budget, would you then revisit the leadership question?

JOEL FITZGIBBON: What, you think the Labor Party's going to change leader between the budget and the September election?

DAVID SPEERS: That's what I'm asking you.

JOEL FITZGIBBON: Well I wouldn't think so.

TOM IGGULDEN: The latest outbreak of leadership sparring is threatening to once again deprive Julia Gillard of clean air.

RADIO COMPERE: You've got members of your party backgrounding the media on matters such as this. You wouldn't be happy with that, surely, would you?

JULIA GILLARD, PRIME MINISTER: Well, look, Leon, I don't get distracted by any of this. We had a ballot last February. We resolved the issue of the Labor leadership.

TOM IGGULDEN: Kevin Rudd's continuing to rule out another challenge, but not the option of being drafted.

KEVIN RUDD, LABOR MP: On the so-called draft that you've just referred to, I support the Prime Minister going through to the next election. All other members of the caucus support the Prime Minister going through to the next election. The issue of a draft doesn't arise.

TOM IGGULDEN: Gillard supporters are reminding the former of prime minister of his undertakings when he lost last year's leadership spill.

STEPHEN SMITH, DEFENCE MINISTER: He said at the time he would not challenge again, and he went further and said if anyone else tried to challenge, he would effectively be a human shield between anyone who was challenging and the Prime Minister.

KEVIN RUDD: Well according to last night's news, someone else accused me of being a terrorist, so you get a bit confused by these things.

TOM IGGULDEN: Labor says it wants to stop talking about itself and start talking about jobs, but there was bad news on that front today. Three companies announced they were either downsizing or outsourcing work overseas.

Origin Energy's losing 350 positions on top of the 500 already announced.

Mineral sands miner Iluka's shedding 200.

And Telstra's phone book business is losing almost 650.

RUPERT EVANS, CPSU: This announcement is a slap in the face to those people who've worked hard to make this company profitable and who are now seeing that repaid by having their jobs sent overseas.

TOM IGGULDEN: Sensis isn't ruling out further job cuts. The union's calling for sacked workers to be reintegrated into Telstra's main business. The Employment Minister's offering his own encouragement.

BILL SHORTEN, EMPLOYMENT MINISTER: My thoughts are with you. You are skilled people. You will find work. The labour market for skilled workers is still reasonably tight.

TOM IGGULDEN: Tom Iggulden, Lateline.