Australian Prime Minister Julia Gillard has revealed she is knitting a red kangaroo for the first baby of Prince William and his wife Kate.

The nation's first woman leader, battling a tough final week in parliament ahead of September elections amid renewed speculation that she could be ousted from within her own party, found time to tell the Australian Women's Weekly she had set herself the task of making the toy.

Gillard, known globally for her stance against sexism, said it was important people saw a different side of her beyond the politics.

"In terms of knitting for Kate Middleton's baby -- I knit for babies -- in part, they are the smaller projects, I've got not that much time in my life," Gillard told the magazine to be published on Wednesday.

"I just thought that it would be a cute project to work on. I thought I would set myself the challenge of knitting a little stuffed toy, and why not a kangaroo?"

The prime minister's office suggested the idea of the knitting story, but the media have made light of it with Sydney's Daily Telegraph calling it "Spins & Needles" and a "last-stitch bid to woo voters".

The charm offensive comes amid more bad opinion polls for Gillard and her centre-left Labor Party, with the latest Newspoll published in The Australian on Tuesday showing her personal support has crashed to record lows.

The poll found that if an election were held now, Labor would be crushed 56 percent to 44 percent by the conservative opposition led by Tony Abbott, a former minister in John Howard's government.

Despite knitting for the royal baby, Gillard said she still hoped Australia would one day become a republic.

"There is a real sense of respect for the Queen, so I do think a natural moment to look again (to a republic) will be when her reign comes to an end," she said.

"Prince William and Kate, and their child, will still be personalities in Australia; people will still follow their lives with interest."

The heir to the British throne and the duchess of Cambridge are expecting the baby in mid-July.