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Support for the Australian government hit an all-time low yesterday amid a growing public backlash against a controversial carbon tax which threatens to derail the leadership of Prime Minister Julia Gillard.

Plummeting poll ratings for Mrs Gillard suggest that she has borne the brunt of voter anger at a plan – designed to punish the worst polluters – that many fear will devastate the economy as the country scrambles to deal with the effects of climate change.

Australia relies on cheap coal for power generation but in the process has become the developed world’s worst producer of greenhouse gases. As the Labor Party launched an £8m advertising campaign to try to sell the policy to a sceptical public, a Herald/Nielsen survey revealed that only 26 per cent would vote Labor – the smallest figure for either of the main parties in the four-decade history of the poll.

Gillard’s personal rating sank, showing her well behind the opposition leader Tony Abbott, a poor campaigner at the last election who appears to have benefited from his criticisms of the plan. “There is just one reason [for the poll result],” said John Stirton, director of Nielsen Poll. “The carbon tax is alienating voters like nothing before it.”

Mrs Gillard’s credibility has been badly damaged since she broke a pre-election pledge last year not to introduce a carbon tax. Last week, she announced an A$23 (£15.20) per ton carbon levy to run for two years. About two-thirds of the proceeds would go to some of the worst-hit consumers through tax cuts, in an attempt to stem opposition to the measure.

She has defended her U-turn by accusing the opposition of “word games” for political advantage and denying that the tax will lead to large price rises for household energy bills.

However, the majority of voters still oppose the plan and big business has launched a vociferous campaign against the changes.

The new tax will be paid by about 500 of the nation’s biggest polluters, with mining companies and airlines expected to be among the worst hit.

It will take effect from next July and be followed by the introduction of a market-based emissions trading scheme in 2015, which penalises polluters but rewards those who reduce their greenhouse gas emissions.

For Australia’s Welsh-born Prime Minister, whose approval rating makes her as unpopular as former Labor leader Paul Keating, the past 12 months have been a political disaster. Once lauded for becoming the country’s first female Prime Minister, she has fallen victim to an issue that has dogged both sides of Australian politics for years

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