A national union figure has confirmed that Julia Gillard's leadership was discussed during an election battle plan meeting attended by a number of Australia's most powerful union and factional heads.

Contrary to denials by ACTU chiefs, a powerbroker who attended the high-level talks in Melbourne on Tuesday told the National Times that there was discussion of Kevin Rudd resuming the prime ministership.

"We were navel gazing over a whole range of options," the union source said. "The idea of Kevin Rudd, or even someone else, taking over as leader was discussed in the context that it might trigger an early election and we would need to work out strategies for our campaign in the event."

His confirmation comes in the wake of a report in the Australian Financial Review this morning of a "union shift" on Ms Gillard.

They also directly contradict ACTU national secretary Dave Oliver's dismissal of the report as "plain wrong" and AWU federal secretary Paul Howes' description of it as "complete b-s".

The source, who demanded anonymity, said if Mr Rudd was reinstated as leader, there was a general consensus that union funds would be best poured directly into an industrial campaign rather than unions banding together with the political branch of the movement, as the former prime minister's feelings towards the factions and unions were clear.

"Let's be clear. There was a very strong feeling of support for Julia Gillard in that room but the discussion was had," the union leader said. "It went for about 10 minutes and then we moved on."

 At the meeting were a number of the nation's most powerful union heads including ACTU president Ged Kearney, CFMEU national secretary Michael O'Connor, Shop Assistants Union secretary Joe De Bruyn, Transport Workers Union boss Tony Sheldon and Mr Oliver.

The group decided to impose a $2 levy on all union members raise $4 million for a campaign fighting fund, which would target Opposition Leader Tony Abbott over his industrial relations policies.

The report said that during the meeting the discussion turned to whether Ms Gillard would survive as party leader.

Sources "with a knowledge of the meeting" said there was an acceptance that time was running out for Ms Gillard, the report said.

But Mr Oliver rubbished the claim, saying the Prime Minister had delivered on policy issues that "matter to us most".

“The Prime Minister came to our congress several weeks ago and received a standing ovation for the work that her government has done in regard to jobs and supporting low-income families and protecting working conditions," he told ABC radio.

"Nothing has changed at all. The movement is supportive of Prime Minister Gillard and her government for the work that is being done on the issues that matter to us most.

“We are talking about security of workers' entitlements. We're talking about secure jobs. We're talking about proper industry policy, such as [in] the automotive industry. All these things are happening and we are supportive of all of that.”

Mr De Bruyn flatly denied the discussion had focused on internal Labor party politics.

"We were there to discuss other matters," he said. "There was passing reference to the political situation but there was certainly no discussion of the leadership."

Mr Howes, who is one of Ms Gillard's key backers, is in Washington DC for the Australian-American Leadership Dialogue, and did not attend Tuesday's meeting.

However, he tweeted his support for Ms Gillard today and said the report was "complete b-s." "All unions are united in supporting the PM," Mr Howes added.

Treasurer Wayne Swan dismissed reports that Ms Gillard was losing the support of the union movement.

"Those reports aren't worth the paper they're written on," he told journalists in Cairns. "They're not true."

Cabinet minister Tanya Plibersek also dismissed the report, saying the leadership issue had been resolved.

Coalition frontbencher Chris Pyne said the report was a strategic leak designed to influence the Labor leadership and put a ‘‘bribe on the table’’.

‘‘What the leak seems to say is that there is $4 million sitting on the table if the Labor caucus does the right thing,’’ Mr Pyne told reporters in Sydney today.

‘‘There is a nudge-nudge, wink-wink to the Labor party caucus that if they do what the faceless men of the union leadership tell them again, then the $4 million will be used to help them defeat the Coalition at the next election.

‘‘If they choose to go in their own direction then the $4 million might not materialise in that campaign.’’

Union leaders at odds on Gillard talk