By chief political correspondent Emma Griffiths
Photo: Prime Minister Julia Gillard enters the House of Representatives for question time in Canberra on June 4, 2013. (AAP: Alan Porritt)
Related Story: Newspoll shows Labor facing electoral wipeout
One of Prime Minister Julia Gillard's strongest Caucus supporters has criticised her handling of the asylum seeker issue, warning that if she does not engage the electorate then Labor is "dead" in critical western Sydney seats.
Laurie Ferguson, who is the member for the western Sydney seat of Werriwa, says he still supports the Prime Minister "very strongly" but has warned the asylum seeker issue is a "major ingredient" in the party's disastrous polling.
Today's Newspoll, published in The Australian newspaper, shows dissatisfaction in Prime Minister Julia Gillard's performance has climbed from 59 per cent to 62 per cent, while only 28 per cent of respondents are satisfied with her performance.
Mr Ferguson challenged Ms Gillard in today's Caucus meeting about the asylum seeker issue, telling her she needs to sell the Government's message better, otherwise "we are dead".
"I just don't think we've cut through on the issue," he told PM.
"Look at the polls, we're going badly - I just think this is a major ingredient.
"I just don't think you succeed in this debate by being reticent and not being engaged with it.
"We know we're polling very badly in western Sydney ... Labor supposedly is going to lose a significant number of seats.
"I'm saying this is a major contributor and I believe it can be turned around."
Mr Ferguson has praised the Prime Minister for having "guts" but said she had to "drive home" the message that there is no easy solution to the asylum seeker problem.
He has blamed disunity in the party for her failure to clearly outline Labor's stance.
"We've had a party that's been very divided for two to three years," he said.
"She's had more than her load of problems. She can't be intervening in every portfolio but I think in this one she's got to take a strong lead in the next few months on it."
Look at the results in ABC election analyst Antony Green's vote calculator
Poll stirs up Labor leadership debate
The poll has also triggered questions about another comeback attempt from former leader Kevin Rudd.
However, Joel Fitzgibbon, a former chief whip and a key supporter of Mr Rudd, says that battle is "done and dusted".
Mr Rudd has conceded that the situation for Labor is "very, very tough".
"Let's just be honest about it - it's very, very tough," he said.
"I think that's the conversation going on right now with all my parliamentary colleagues who, I've got to say, knowing most of them really well, work their guts out in their communities. So it's really tough going."
The Prime Minister has told Parliament that a newspaper report claiming the Foreign Minister has urged her to quit is untrue.
Columnist Philip Adams wrote in the Australian that senior figures including Bob Carr have privately told Ms Gillard she should go.
Adams is a friend and supporter of former prime minister Kevin Rudd.
Ms Gillard was asked about the report during question time by Deputy Liberal Leader Julie Bishop.
"Can the Prime Minister confirm the report in the media today that she has been approached by the Foreign Minister to quit her job for the good of the party?" Ms Bishop asked.
"To the deputy leader of the Opposition - that report is entirely untrue," Ms Gillard fired back.
Questions in Caucus about handling of foreign worker crackdown
Sources have told the ABC that both Kevin Rudd and retiring Labor stalwart Martin Ferguson raised questions in Caucus about the handling of the crackdown on 457 foreign worker visas.
They apparently pushed Immigration Minister Brendon O'Connor to reveal details about his claims the system has been rorted.
However, there were a range of opinions expressed on the 457 issue with backbencher Nick Champion, who is the member for the South Australian seat of Wakefield, calling for the 457 visa scheme to be scrapped altogether.
Geoff Lyons, who holds the Tasmanian seat of Bass, told Caucus that the Government's theme of supporting "jobs and growth" was not working in his state.
Labor MPs appear to be spooked by the latest poll, showing a two point boost for the Coalition after preferences, leaving the two-party preferred figure at 58 versus 42.
If the two-party preferred results followed through to election day with a uniform swing of 8.1 per cent across the country, Labor would lose 35 seats.
It would be left with 38 MPs in the House of Representatives, while the Coalition would hold 108.
Mr Rudd (Griffith) would be the only Queensland MP to retain his seat - albeit on the slimmest of margins - while Ms Gillard (Lalor) and Mr Fitzgibbon (Hunter) would also be returned.
Laurie Ferguson would be in line to lose in Werriwa, a seat held by Labor for the past 80 years.
Fitzgibbon says 'die has been cast' for Labor
Mr Rudd backed out of the latest leadership stoush in March when it became apparent that Ms Gillard still had the numbers in Caucus.
Mr Fitzgibbon said that put an end to the leadership battle.
"I had a bit to say on this just a couple of months ago - I suggested that the party wanted to think about some new directions, some new paths," he told Channel Seven.
"That idea was rejected and I think we've all just got to get on with it.
"The die has been cast."
When asked if the ALP would go to the poll with Ms Gillard as leader, Mr Fitzgibbon said "I believe that's the case".
When asked about the poll, he poked fun at the stock standard response of politicians to polling, holding up a piece of paper claiming it was the "manual" for how to handle questions on the issue.
"I brought the manual with me. I'll see what it says," he laughed.
"It says I should say polls come and go but the only poll that matters is on election day."
