The Labor Party has exploded into open warfare at the highest levels following the defeat of the senior cabinet minister Penny Wong to the number one Senate ticket in favour of one of the lesser known faceless men who helped install Julia Gillard to the Prime Ministership in 2010.

Right-faction powerbroker Don Farrell defeated Senator Wong in a ballot today by 112 votes to 83 with the Finance Minister to be listed second on the South Australian Senate ballot paper at the next federal election.

Senior Labor frontbencher and left-faction figure Anthony Albanese let fly today at ‘‘union powerbrokers’’ saying Labor’s ongoing factional wars were evidence of a broken internal system.

Accusing his party of ignoring the electorate in favour of its own ructions, Mr Albanese said he will demand this week that the ALP national executive overturn the decision and promote Senator Wong to the number one spot.

He labelled the move as ‘‘gross self-indulgent rubbish’’ taken by ‘‘those who should care more about the party and less about themselves.’’

‘‘This defies common sense,’’ Mr Albanese said. ‘‘Modern Labor cannot take decisions as if our internal processes are the end game and ignore the electorate. Voters will be dismayed that a talented senior economic Minister in Penny Wong is not deemed fit to lead the Senate ticket.

‘‘This reinforces the need for some of the union powerbrokers to have a good look at themselves and the Party to get serious about reform.

‘‘If this is the outcome of the system, the system needs to change.’’

In yet another episode of Labor’s message being lost by its own hand, Ms Gillard addressed the party faithful in a keynote address for the branch’s annual state conference just hours before SA Labor’s dominant Right faction made good on a promise to install their man - parliamentary secretary and union heavyweight Senator Farrell - in the top spot ahead of the Finance Minister. Ms Wong is widely considered as one of the government’s stand-out performers. 

McKew view

Mr Albanese’s attack on the unions and ‘‘grubby’’ backroom deals comes at a perilously tense time for the Gillard Government with former journalist and Labor MP Maxine McKew describing in a new book Ms Gillard’s ascension to power over former prime minister Kevin Rudd as ‘‘one of the most brutal coups in Australian political history.’’

Ms McKew in the book, Tales from the Political Trenches, to be published on Monday, Ms Gillard was a ’’disloyal deputy’’ who was directly undermining her leader in the days before she challenged him.

Ms Gillard has always maintained she was loyal to Mr Rudd until the day she challenged him. But Ms McKew says the then deputy prime minister showed internal Labor research critical of Mr Rudd to a senior member of the caucus in the days before the challenge.

The former ABC journalist and Rudd loyalist - who lost her seat of Bennelong in the 2010 election - is scathing of the ‘‘factional lesser mortals’’ who tried to control Mr Rudd and retaliated by overthrowing him when he wouldn’t cede to their demand.

‘‘Labor senators like Don Farrell and David Feeney barely registered with the average voter, yet here they were, seemingly at the centre of things," she says in the book.

"Farrell is from South Australia, where he is the flag carrier for the Shop, Distributive and Allied Employees Association. He’s been in the Senate since mid-2008. Feeney, a right-wing powerbroker from Victoria with a background with the Transport Workers Union, took up his Senate seat at the same time.’’

Federal Treasurer Wayne Swan hit back at McKew’s claims today, saying she approached him about her political book - but only after she’d finished writing it.

‘‘I was somewhat bemused by that,’’ Mr Swan said.

‘‘She sent me some questions and I responded. After the book was finished.’’

Mr Swan said he hasn’t read the book, but after reading media reports he doesn’t believe it is balanced.

He brushed aside the suggestion he was disloyal to Mr Rudd, or the claim that Ms McKew had sat in on cabinet meetings.

‘‘I’ve already said I don’t believe it’s a balanced account. That’s the end of it as far as I’m concerned,’’ he said.

Wong Senate Snub Risks Factional Flareup

on topic ……

The night before he turned against his prime minister, Wayne Swan went to Kevin Rudd's office for a drink and congratulated him on defending the newly announced mining tax, a new book reports.

Never a clean way to slay a king

As Julia Gillard's challenge unfolded the next day, the man Mr Rudd had appointed Treasurer lacked the courage to tell him he was abandoning him: "In the case of Wayne, I did not even receive a telephone call advising me he had decided to withdraw his support from me and back Julia as replacement prime minister," Mr Rudd tells the former Labor MP Maxine McKew in her new book. "I had to telephone him myself."

Mr Swan was responsible for bungling the introduction of the mining tax, and Mr Rudd called in the Resources Minister, Martin Ferguson, to fix the mess, McKew writes in Tales from the Political Trenches, to be published on Monday.

But while Mr Rudd had defended Mr Swan, the Treasurer did not reciprocate: "In response to my question on the Wednesday afternoon," the day of the coup, "when I asked him 'What's happening?', he replied he would be 'voting for change'," says Mr Rudd.

"It was only later that I discovered that an arrangement had been put in place to make him deputy prime minister" in a Gillard government. "But the core point was this: at no stage did either Julia or Wayne say to me that, unless I undertook change x, y or z, there would be a challenge to my leadership. So did I feel let down and indeed betrayed? Well of course."

McKew offers a tough verdict on the leadership coup against a first-term prime minister: "It's never happened before in our party. It was engineered and executed by a small group of people intent on indulging their own political vanities."

She is referring to the factional lieutenants and union chiefs who led the coup, the so-called "faceless men." But she also reports that Ms Gillard herself was using internal research to undermine Mr Rudd days before the coup as part of a "conspiracy".

Ms Gillard has maintained that she refused any part in any plotting and only made up her mind to challenge on the day of the coup itself.

Until now, Mr Rudd has largely been blamed for the mishandling of the mining tax. The announcement of the tax in its original form in 2010 provoked the big multinational miners BHP, Rio and Xstrata to fund a vigorous $22 million ad campaign against the tax. It was used within the caucus to argue that Mr Rudd had gone to war with the business community.

But McKew holds Mr Swan squarely responsible: "Rudd trusted his Treasurer."

The prime minister had wanted to avoid a contentious debate on a mining tax and so had set down key conditions for Mr Swan in setting up the tax: "Rudd told Swan that he needed to secure the support of at least one of the major industry players and that he needed to have the states on side. Neither would be easy. But as West Australian Premier Colin Barnett has said, Rudd's 'jaw just about hit the table' when Barnett told the PM at a COAG meeting in April 2010 that the tax was a dead duck."

The big mining firms "felt blindsided by an uncompromising Treasurer," McKew writes. "Swan had not delivered and Rudd had come to believe that he had been sold a pup."

Mr Rudd asked Mr Ferguson to find a political solution. He believed a resolution was in sight but the coup struck him down before one could be delivered.

When Ms Gillard was endorsed by the caucus as leader, she immediately opened new negotiations with the miners. After intensive talks, she announced a deal with a new name and structure for the tax just eight days after the coup.

The tax as originally structured would have yielded $9 billion in revenue for the government in its first year, 2012-13, but under the new deal it was to be $3 billion until Mr Swan last week announced that it had been revised down to $2 billion.

In the first quarter of this fiscal year the three biggest miners reportedly have paid zero mining tax.

Yesterday a spokesman for Mr Swan said McKew's book was ''too full of errors, misunderstanding and untruths … to be taken seriously''.

Swan Drank With PM The Night Before Coup