Federal Labor leader Simon Crean is holding a crisis meeting at Parliament House in Canberra this afternoon, with the fate of his leadership remaining uncertain.
Mr Crean's leadership is in turmoil after factional powerbrokers told the embattled leader he no longer has majority support in the caucus.
Some MPs have been told if Mr Crean will not budge, then a spill will be called at next Tuesday's caucus meeting.
The number crunching has already started and the contenders include Kevin Rudd, Mark Latham and Kim Beazley.
Sources says the party is looking to a generational change and Mark Latham is the frontrunner.
Mr Crean is currently bunkered down in his office with his advisors and close colleagues.
New South Wales Premier Bob Carr says speculation over the leadership must be settled as soon as possible.
It's not pretty, but it's the way it's done on both sides of the aisle. Along with the absence of any bill of rights, Australia's major parties are the last ones left in the democratic world where the party leadership is decided exclusively by the caucus.
Australia once led the world in popular democracy - first constitution made by the people. first elected upper house, second to recognise female suffrage after New Zealand. It's time we picked up that heritage again. A bill of rights might be nice, but democratic election of party leaders would be an excellent start and much easier to achieve.
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