The Senate has rejected the government's emissions trading scheme a second time, giving Labor a trigger for a double dissolution election.
The Senate voted 41 to 33 to reject legislation setting up the carbon pollution reduction scheme.
The vote, taken at 11.47am (AEDT) today, followed more than 40 hours of debate in the upper house.
Liberal senators Sue Boyce and Judith Troeth voted with the government, but their support was not enough to give Labor a majority.
The crossbench, including the Australian Greens, voted with other coalition senators.
Prime Minister Kevin Rudd is now able to call a double dissolution election in an attempt to push through the carbon pollution reduction scheme.
However he has said in the past that he would prefer to serve a full term rather than call an early election. Mr Rudd is currently in the United States.
The ETS legislation was widely expected to be defeated following the chaos within the Liberal party over the past week.
New federal Opposition Leader Tony Abbott was elected to his post after refusing to standby previous leader Malcolm Turnbull's commitment to push through an amended ETS, after it was adjusted in collaboration with the Labor party.
Mr Abbott has previously said he is unconcerned by the prospect of an election and has gone so far as to declare he can win.
"The best way to unite a political party is to really go after your opponents, which is what I intend to do," he told the Nine Network today.
"It's not going to be easy, and we're certainly going to be the underdogs, but Australians like underdogs, they respect people who have a go and that's what I intend to do."
More to come...
