Australian Prime Minister Julia Gillard is expected to announce a reshuffle this weekend following independent Member of Parliament (MP) Rob Oakeshott's rejection of a cabinet portfolio in a minority Labor government, local media reported on Friday.

The former Nationals MP Oakeshott turned down Gillard's offer to be minister for regional Australia, after two days of consideration.

Under the deal, Oakeshott would have been allowed to sit in cabinet for regional development issues while keeping his independent parliamentary voting rights on all other matters.

But he declined the offer after speaking with Gillard by phone on Friday afternoon.

According to Australian Associated Press, Oakeshott's rejection of a portfolio means Gillard can announce the line-up of her ministry, possibly on Saturday.

Former prime minister Kevin Rudd is widely expected to be given the post of foreign affairs minister.

Incumbent Foreign Minister Stephen Smith is tipped for the vacated defense portfolio, while Financial Services Minister Chris Bowen has been mooted as the next finance minister.

Climate Minister Penny Wong is expected to leave the politically challenging climate change round to become attorney general.

Under that scenario, junior minister Greg Combet, a former Australian Council of Trade Unions (ACTU) boss, could take over cabinet responsibility for tackling global warning.

Simon Crean, who holds the super portfolios of education, employment and workplace relations, said he would be happy to accept any position.

"I'm delighted to play whatever constructive role I can play in the Gillard government -- I think it will be an exciting time," Crean told reporters in Melbourne on Friday.

"I keep hearing people say how difficult it is going to be -- I thrive in difficult circumstances."

Meanwhile, Opposition Leader Tony Abbott is expected to unveil a more minimal reshuffle for the Coalition in coming days.

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