WHEN Julia Gillard ordered her post-election review of the party, it seemed simply what a leader does after a poor campaign, unless you noticed the double agenda. The review was also to examine Kevin Rudd's years. Now it has come back to bite not just Rudd but Gillard too.
John Faulkner, Steve Bracks and Bob Carr produced a modest plan to give the rank and file more power, but the weekend ALP conference emasculated it. So Gillard is being condemned for failing to achieve adequate reform.
She copped more flak when the report's ''sealed'' section was leaked to discredit Rudd, in retaliation, it appears, for what was perceived as destabilisation during the weekend. A Sunday newspaper headline had declared that the ''clock's ticking'' on a challenge. The article reported that Rudd supporters were furious at Gillard snubbing her predecessor by omitting him from her speech opening the conference.
Not me, not me, cried Gillard, of the leak. But it was seen as coming from someone trying to help her, or maybe just to harm Rudd - because the leak didn't assist the PM at all. It simply turned into a big problem.
Inevitably, the pressure intensified for the report's ''secret'' part to be released, as Rudd, Faulkner, Bracks and Carr want, but not Gillard - who would have been more sensible to have had the report out there ages ago, rather than give the impression of hiding something.
The leaked report has become the latest irritant in the poisonous relationship between Gillard and Rudd - a relationship that will define the early months of Labor's new year.
Gillard and the government have been getting very modest improvement in the polls. But the dreadful base Labor vote means the leadership issue is only dormant, not dead.
Rudd, whose ambition to retake the prime ministership had been encouraged by Gillard's difficulties, is frustrated that no putsch was possible before Christmas. He finds himself in awkward limbo - not knowing whether the basic ground will be right for an early 2012 move, let alone whether he would have any chance of pulling one off in a party suspicious of him.
In the meantime, his nature and his impatience lead him into counterproductive acts of provocation and foolishness. These have included that amazing rock star appearance at a concert during CHOGM. There was Sunday's ''leader's'' speech when introducing the foreign affairs platform at the national conference. The previous evening he was at a Rainbow Labor celebration for the win on gay marriage - which he opposes.
The trouble with Kevin is that he is Kevin and can't change his ways. Every excess reminds people of the downsides of his time as leader. For example, before the conference he gave an address calling for much more radical party reform than that being urged by Faulkner and co. But this was the man who when leader took away the right of caucus to choose the frontbench.
Yet occasions such as his conference foreign affairs speech also remind people how well he can perform.
If the party feels it needs to replace Gillard, Rudd remains the only sensible alternative. But while you'd expect Rudd to be strutting his stuff, it is counterproductive for him to be out there dressed in the political equivalent of spangles, performing belly dances. He needs to be a whole lot more subtle, but seems incapable of it. He insists he must be himself, which is not always the best self to have on show.
His inappropriate campaigning, as well as annoying caucus members, does raise more questions of how he would be as leader second time around. It's delusional to think he would have transformed in style, but is there a danger he has gone backwards and would be even more difficult? Supporters would deny this, but it is a worrying thought for those who have little faith that Gillard can revive.
The Gillard-Rudd struggle will continue episodically . The PM's only option is to publicly feign a respect she does not feel, which she does much of the time. But why does she allow herself lapses, such as the speech's airbrushing? Surely she or her staff should have spotted the danger, or refrained from the indulgence?
Gillard has a clearer path ahead than Rudd. Rudd's hopes depend on a bad performance by her, and resulting poor polls. Her future is to a much greater extent in her own hands.
She has to look strong; the government has to beat Tony Abbott in the economic debate and exploit his weak points more effectively; and Labor has to be seen to deliver afresh in coming months. It also has to sell the message that it has already done a lot. There is some optimism among those around Gillard about 2012, especially now the parliamentary numbers are safer and after this week's good growth figure and interest rate cut. But given all that's happened since she became PM, it's an even bet whether she will falter or ''move forward''.
On the Rudd front, there are three options for next year. Things go really bad for Gillard and he challenges; her polling improves to the extent he regards his cause as hopeless and backs off; or he has a go anyway, to weaken her, in the hope of a later successful bid. There is a fourth nightmare option: Gillard holds Rudd at bay because the party still can't stand him, but Rudd does not give up his ambition or his public forays.
Michelle Grattan is political editor.
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