Australia PM challenges opposition over allegation

The Australian prime minister Kevin Rudd demands the opposition leader produce an e-mail at the heart of corruption allegations.

SYDNEY // Australian prime minister Kevin Rudd demanded opposition leader Malcolm Turnbull resigns if he fails to produce an e-mail at the heart of allegations that Mr Rudd misled parliament. The email relates to accusations Mr Rudd sought special government treatment for a friend under a scheme to help struggling businesses find finance during the global financial crisis. The opposition has demanded both Mr Rudd and Treasurer Wayne Swan quit over the affair.

The controversy comes at the midpoint of Mr Rudd's three-year term in office, just as the government is struggling to drive legislation through a hostile upper house of parliament and amid speculation that Mr Rudd might want an early election. "If when parliament resumes in 24 hours, Mr Turnbull fails to produce this e-mail, this e-mail upon which his entire case against the government is based, for authentication he has no alternative but to stand in the parliament, apologise and to resign," Mr Rudd said. "These are most serious matters."

The email allegedly came from Mr Rudd's office, but the government says it has failed to locate the document on its computers and has called in police to investigate. Mr Turnbull has previously denied he has a copy. The row stems from Mr Rudd's friendship with a Queensland car dealer and accusations that he asked Treasury officials to help the man's company gain access to a government programme.

It is the first such storm to engulf Mr Rudd personally since he won office in late 2007, and comes two weeks after the defence minister resigned over accusations that his office helped arrange meetings for his brother with defence officials. However, Mr Rudd remains well ahead in opinion polls, despite the slowing economy and political setbacks as he battles to push his programme, including plans for an emissions trading scheme, through an opposition-dominated Senate.

Mr Rudd would normally face an election in late 2010, but may have a trigger to go in December this year or early 2010 if the Senate continues to reject his carbon trade plan. Mr Rudd has previously told parliament his office did not ask Treasury officials to help the car dealer access to the OzCar scheme. * Reuters