Australian Prime Minister Julia Gillard has held onto the leadership of the Labor Party, comfortably beating her challenger Kevin Rudd in a caucus ballot.
The party's returning officer announced that Ms Gillard was was reaffirmed as Prime Minister with 71 votes to 31 for Mr Rudd.
The margin is the biggest win in a Labor leadership ballot in 30 years.
The leadership was decided at a meeting of 102 caucus members in Canberra's Parliament House on Monday.
Ms Gillard said on Sunday she wanted the government to unite following the leadership vote and said she was confident of victory.
Mr Rudd, who had resigned as Foreign Minister in Washington last week, has said he would not challenge again before the next election and would happily sit on the backbench.
He said he was not happy with the timing of Monday's ballot, but said he stood for the leadership because he believed he was the only person capable of leading Labor to an election victory over Tony Abbott.
Mr Rudd was dumped as prime minister in June 2010 after an internal party coup led by Ms Gillard.
Julia Gillard went on to secure a one-seat majority in the 150-seat parliament with support from the Greens and two independents following an election in 2010.
Financial markets have largely ignored the leadership fight, given there are few policy differences between the pair, with both committed to return to a small budget surplus by mid 2013.
The opposition has capitalised on the government fighting, and in a series of television ads said it would not matter which of the two was elected leader of a bad government.
Opposition leader Tony Abbott told reporters the best option for the country is a change of government, adding that there should be an early election.
