Miners fear that if Mr Rudd returned as leader, he would redesign the Mining Tax along the lines of the original resource super profits tax (RSPT), take it to an election and win.

Mr Rudd lost the leadership in June 2010 as the mining campaign against the RSPT reached a crescendo. Immediately afterwards, Ms Gillard, Mr Swan and Resources Minister Martin Ferguson renegotiated the tax with BHP Billiton, Rio Tinto and Xstrata.

Key concessions granted then are now being blamed for the MRRT raising just $126 million in its first six months, in a year in which it was budgeted to raise $2 billion.

Apart from the royalties change, miners were allowed to deduct the market value of existing assets over the long term, rather than deducting the book value over five years.

As his backbench supporters led calls to toughen the tax, Mr Rudd was critical of Ms Gillard and Mr Swan for kowtowing to the miners and being reluctant to take them on again.

No government should ever take a backwards step in pursuit of the national interest, he told Sky News.

Mr Rudd blamed Mr Swan for the troubles caused by the original RSPT by pointing out the policy emerged from the Henry taxation review that Mr Swan commissioned. We supported him, took it to the public debate, he said.

While Mr Swan has argued low iron ore prices are the cause of the MRRT failing to collect much revenue, Mr Rudd insinuated it was really the concessions Ms Gillard and Mr Swan granted the miners during the renegotiation.

Abbott warns on solemn commitment

The new Prime Minister and the Treasurer elected to make these changes, he said.

Mr Rudd said it was up to them whether the tax should be redesigned but they also need to be mindful of what undertakings theyve given to the mining industry as well.

He said history would be the judge of why the tax had underperformed.

In Parliament, Opposition Leader Tony Abbott said if the government redesigned the tax it would be breaching a solemn commitment made with the mining industry.

Amid conflicting statements by her ministers about the governments intentions, Ms Gillard, under repeated questioning in Parliament, declined to absolutely rule out any change, saying, Weve got no plans to change the MRRT. We have got a process that has been under way for quite some time.

Ms Gillard was alluding to a decision in December to try to resolve the royalties issue by negotiating with the states after a panel reviewing distribution of the GST said the situation was undesirable and unsustainable.

With no resolution with the states likely, the governments only real option will be to legislate to limit the royalties, which can be deducted to the level of royalties as at July 1, 2011.

This cap is worth more than $2 billion in revenue over four years.

Warning not to destabilise party

Having no cap allows the state governments to keep raising royalties and gouge the MRRT revenue.

Following a report in Tuesdays Financial Review that Mr Swan had started negotiating with BHP before the 2010 leadership spill about changing the assets deduction to market value, a spokesman for Mr Rudd said the former prime minister had no idea at the time this was taking place.

Previously, allies of Mr Rudd have alleged Mr Swan and Ms Gillard cooked up a deal with the big miners behind his back and this was tied to the leadership spill.

Both Mr Swan and Ms Gillard have denied this.

One supporter of Ms Gillard said he feared Mr Rudds intervention on Tuesday was a rerun of events a year ago when Mr Rudd stepped up his efforts to destabilise the government and bring on a spill.

If hes going to drag the party through all of this again, hed better have a plan other than causing ongoing damage, the MP said. from Financial Review