FEDERAL Member for Flynn Ken O'Dowd believes there is a very real prospect of an early federal election.
Mr O'Dowd said if foreign minister Kevin Rudd was successful in his bid to become the new leader of the Labor Party and Prime Minister, he believed he would immediately call an election.
"In the event Kevin Rudd is successful in his bid to become the prime minister I believe that he would call an early election in an attempt to re-establish himself and redefine his leadership," Mr O'Dowd said.
The continuing leadership tensions within federal Labor have continued to boil over into the media and social network with the release of the video featuring Mr Rudd on YouTube.
"This is just further evidence of the dysfunctional government we have in Canberra where Labor is more focused on themselves rather than on governing Australia," Mr O'Dowd said.
Mr O'Dowd said there were many business leaders suggesting this uncertainty was causing damage to Australia's reputation and there had been an alarming number of job losses in the production sector.
"Flynn is one of the economic powerhouse regions in the nation," he said.
"This leadership speculation has created nothing but uncertainty in the business sector."
He said he expected to see a challenge when parliament sat next week.
However, a number of senior Labor politicians spoke out strongly against a leadership challenge yesterday, saying Mr Rudd did not have the numbers and that Ms Gillard should not need to call a leadership vote to assert her own authority.