By James Grubel
CANBERRA (Reuters) - Australian Prime Minister Julia Gillard lured one of the ruling party's elder statesmen out of retirement to become her new foreign minister on Friday, a bold move that gives her unpopular government a potential leadership alternative.
Gillard appointed Bob Carr, a strong ally and former premier of the New South Wales state, to replace Kevin Rudd, who quit as foreign minister a week ago and then lost a leadership challenge against Gillard on Monday.
Carr, 65, retired from politics in 2005 after 10 years as premier of the nation's most populous state, where he played a key role in helping Sydney host the 2000 Olympics.
"He's certainly a person of ability," sacked minister Robert McClelland told reporters on Friday when asked if Carr would be a good leader. "But that's a matter for others to judge."
Though Gillard stamped her authority over the ruling Labor Party in soundly defeating Rudd in this week's leadership vote, the party continues to languish in opinion polls as she struggles to overturn perceptions that she is distrustful.
Her internal critics on the government backbench say she could still be replaced before the next election, due in the second half of 2013, if she cannot lift support in the polls.
However, Carr will sit in parliament's upper house Senate, which makes it more difficult for him to be drafted in as a possible replacement for Gillard, as he would first need to resign and win a seat in parliament's lower house.
The last prime minister to come from the Senate was John Gorton who became Liberal Party leader in 1968 after his predecessor disappeared while swimming in the sea. Gorton had to win a lower-house by-election before he could take the job.
The current minority government has a knife-edge, one-seat majority in parliament, with the backing of the Greens and two independents, and any by-election would be risky as a loss could force a change of government.
Carr's appointment also signals Gillard asserting her authority over her new ministry, as several key ministers had lobbied against Carr's move to Canberra. Gillard had repeatedly denied she was looking at recruiting Carr to her government.
Carr will be sworn in as a minister after taking up a vacancy in the Senate, brought about by the resignation of a Labor senator. He is likely to take his seat on March 13.
At a media conference with Gillard on Friday, Carr denied any leadership ambitions, declaring his strong support for the prime minister.
"I'm an unbounded admirer of this prime minister," Carr said when asked if he had prime ministerial aspirations.
"When the prime minister put that offer to me late on Thursday morning, no part of me could say no," he added when asked why he had accepted the foreign ministry.
Carr, a bookish intellectual and strong fan of American history and politics, has been a regular writer on U.S. politics.
He said he would consult Rudd and other former foreign ministers, and said he would continue Australia's push to win a seat on the U.N. Security Council.
McClelland, who was a strong supporter of Rudd's leadership challenge, was dumped from the ministry in Gillard's reshuffle, but said he would continue to sit on the backbench, ending suggestions he could quit and force a by-election.
Resources Minister Martin Ferguson, Transport Minister Anthony Albanese and Immigration Minister Chris Bowen, who also backed Rudd in the leadership vote, retained their jobs.
(Editing by Lincoln Feast and Mark Bendeich)