The Australian Labor Party is bracing itself for a difficult election year, after internal research identified Prime Minister Rudd's policy failures and backdowns as a bigger moral challenge than dealing with climate change. ALP polling also shows that for Labor, Kevin Rudd is now a bigger cancer on democracy than political advertising.

"This is the worst news I've had since I worked out that 'Kevin' doesn't rhyme with 2010," said ALP National Secretary Karl Bitar.

"The best we've come up with so far is 'Kev Again in Twenty Ten'," Mr Bitar added.

"And the responses to that in focus groups so far range from 'depressing' to 'Latham'."

"This is really undermining our T-shirt based re-election strategy," he added.

ALP pollsters are at a loss to explain the sudden and dramatic slump in Mr Rudd's popularity, although one senior insider pointed out "it's less of a mystery than how he became popular in the first place."

Despite enjoying unprecedentedly high personal approval ratings in his first 18 months as PM, Mr Rudd is now only regarded as an electoral asset by the Opposition.

"Kevin Rudd is very beatable," said Liberal Party Director Brian Loughnane."If it wasn't for the fact that we've got to put forward an alternative leader, we'd be a cert at the next election."

In response to the latest poll numbers, Mr Rudd has ordered his advisers to work around the clock, and without meals, to solve the problem of voters perceiving him as a tyrannical and unpleasant control freak.

The PM also hopes to deal with the issue though bold new policy announcements which will be leaked to the media before being rubber-stamped by Cabinet and, then, later still, revealed to Peter Garrett.

ALP strategists are now openly canvassing the option of replacing Mr Rudd with the increasingly popular Deputy Prime Minister, Julia Gillard. "Kevin's brand is damaged because of the ETS backdown, his backflip on advertising on mining tax, and the failure of the home insulation scheme," one National Committee member said. "By contrast, Julia's inept handling of the Building the Education Revolution process hasn't yet made her unpopular, which makes her a much better option."

But senior figures who recall the damaging Hawke/Keating leadership struggle in the 1980s say the Party is likely to retain Rudd, in line with its traditional approach of sticking with an obviously failing leader until it is too late.

"Rudd can still rescue himself if he sticks to the one thing he does well," Mr Bitar said. "So we'll just get Kevin to deliver one big speech in which he says sorry. Thankfully he has a lot to apologise for."