JULIA GILLARD will oversee the process to replace the NSW Labor senator Mark Arbib.
Ms Gillard, in the midst of reshuffling her frontbench after the leadership challenge and Senator Arbib's resignation on Monday, said whoever NSW Labor sent to Canberra must be ministerial material.
''I will be making sure that there is a candidate selected who is of high quality and can make a contribution to the Labor team as we get on with delivering on the things that we have promised the Australian people,'' she said.
The front runners to fill the casual vacancy are the former ALP national president and indigenous spokesman, Warren Mundine, and a foreign policy academic, Michael Fullilove.
The biggest spot Ms Gillard must fill is Kevin Rudd's job as foreign affairs minister.
On Monday night, after Senator Arbib's shock announcement, the NSW Labor general secretary, Sam Dastyari, rang the former premier Bob Carr and suggested he nominate for the Senate spot which NSW Labor is entitled to fill.
During the discussion, it was agreed Mr Carr would be entitled to an ''immediate elevation'' to a senior portfolio, most likely foreign affairs, and this would be a condition of his accepting. Mr Carr said he would think about it overnight. Yesterday, several hours after smh.com.au revealed details of the offer, Mr Carr issued a statement declining.
Mr Dastyari told the Herald later ''I still think he'd make a great federal member''. He tweeted: ''NSW Labor would have loved to see Bob Carr in the Senate.''
Federal Labor sources said there was some internal resistance in Canberra to Mr Carr taking a portfolio and they believe that was why the story was leaked.
However, the approach to Mr Carr had the support of several senior ministers, including the Senate leadership, who believe Labor needs to bolster its talent in the Senate.
Ms Gillard says she will not reveal her new frontbench until later this week, most likely after Parliament rises on Thursday.
It is understood the chief government whip, Joel Fitzgibbon, who stood down as defence minister in June 2009 after allegations about his ministerial conduct, might return to the executive.
The bad blood over the leadership spill continued to fester, with the Gillard loyalist Simon Crean urging the Prime Minister to use her bolstered authority to purge ministers who had supported Mr Rudd. ''She has already shown a new assertiveness. The reshuffle should be part of that,'' he said.
A Rudd supporter and NSW senator, Doug Cameron, took issue with Mr Crean. He said those who voted for Mr Rudd did so ''because they believed in the party'' and ''any recriminations, I think, would be wrong''.
Five ministers supported Mr Rudd. Anthony Albanese and Chris Bowen are believed to be safe, Martin Ferguson's future is uncertain and most speculation surrounds Kim Carr and Robert McClelland.
One of Senator Carr's allies warned any move by Ms Gillard against him would be regarded as inflammatory.
Some of her supporters are urging her to show mercy in the name of reconciliation. Ms Gillard refused to give any guarantees yesterday, saying she would choose her team on merit.