With the stench of the Wollongong Council corruption scandal, developer donations and the New South Wales State Government’s radical planning reforms believed to be the main reasons for the Labor Party’s fall from favour, the Premier, Nathan Rees, said voters had sent a clear message to his Government.

Opinion polls have shown the Clark Government trailing the main opposition National Party for several months, although the gap narrowed to 6.5 percentage points at the start of September. The announcement came amidst a scandal involving political donations to Foreign Minister Winston Peters’ New Zealand First Party.

In his keenly-awaited memoirs, the former treasurer says he knew “in his bones that the 2007 election was lost even before the first votes were counted - and he blames the loss entirely on John Howard’s reluctance to give him the leadership”. “We lost because we failed to renew,” Mr Costello writes. “We did not arrange the leadership transition.”

Peter Costello has all but ruled out running for the Liberal leadership. “I’m not seeking the Liberal Party leadership,” the former treasurer said in an interview. “They say: ‘Oh we’ve had a bad week, better bring Costello back.’ I think that’s basically what happened. And I said: ‘No, I’m not seeking the leadership, I don’t want the leadership.’

In a blunt warning to the national congress of the Returned and Services League, Kevin Rudd also said he wanted to use Australia’s status as “a middle power” to promote comprehensive diplomatic engagement within the region and through the UN as a buffer against regional rivalries.

88 per cent of those surveyed said Australia should introduce an emissions trading scheme, with 61 per cent saying it should happen regardless of what other countries did. A clear majority, 58 per cent, said they would be prepared to pay more for energy, although only 50 per cent of Coalition voters were prepared to accept price rises.

The Nationals have made their royalties for regions plan the non-negotiable starting point for their support of either major party following Saturday’s inconclusive poll. Neither party is likely to be able to form government in their own right following a 6 per cent swing against the governing Labor party.

Needing to win nine seats to form a conservative government with the help of the Nationals, the Liberals were almost certain to win ten after yesterday’s state election. Huge swings of more than six per cent against the government in many seats exceeded poll predictions of a four per cent swing to the opposition.

The Newspoll indicates Labor could lose at least nine seats - and office - if a 4 per cent swing in marginal seats becomes uniform across the state. The results are seriously bad news for Labor, which earlier this week said it would have lost an election held last weekend.

Nathan Rees, who entered New South Wales Parliament only 18 months ago, is to replace Morris Iemma as NSW premier. Mr Iemma fell on his sword this morning after losing his Right faction’s support, the first time in the 117-year history of the Labor Party a premier has been forced out.