Former Australian prime minister Gough Whitlam dead at 98

SYDNEY - Former prime minister Gough Whitlam, one of Australia's most admired figures who led the nation through a period of massive change, died Tuesday aged 98, his family said.

"Our father, Gough Whitlam, has died this morning at the age of 98," his children Antony, Nicholas, Stephen and Catherine said in a statement.

"A loving and generous father, he was a source of inspiration to us and our families and for millions of Australians."

Conservative Prime Minister Tony Abbott called the Labor stalwart "a giant of his time" and instructed flags around the country to be flown at half mast.

"He united the Australian Labor Party ... and seemed, in so many ways, larger than life," said Abbott of a man who spent the later years of his life in a Sydney aged care home.

The flamboyant Whitlam remained one of Australia's most towering figures despite being the only prime minister to be sacked, a touchstone moment in the nation's political history.

He led Labor to its first victory in 23 years at the December 1972 election on the back of the famous "It's Time" campaign, before being sensationally sacked in 1975 by Governor-General Sir John Kerr, the Queen's representative.

His dismissal was prompted by a refusal by parliament's upper house, where his Labor Party did not hold a majority, to pass a budget bill until the government agreed to call a general election.

To end the impasse, Kerr took the unprecedented step of sacking Whitlam and installing then opposition leader Malcolm Fraser as caretaker prime minister.

Despite being in power for only three turbulent years, Whitlam launched sweeping reforms of the nation's economic and cultural affairs, cementing his place as one of Australia's most revered and respected leaders.

He stopped conscription, introduced free university education, recognised communist China, pulled troops from Vietnam, abolished the death penalty for federal crimes and reduced the voting age to 18.

The Labor titan was also the first Australian leader to visit China.

His family said there would be a private cremation and a public memorial service.

Nation lost a legend

Abbott paid tribute to Whitlam's lifetime of service to his country, in the air force during World War II, as a politician and ambassador.

"In his own party, he inspired a legion of young people to get involved in public life," said Abbott.

"He established diplomatic relations with China and was the first Australian Prime Minister to visit China. China is our largest trading partner. That is an enduring legacy."

He also recognised the importance of Whitlam's late wife Margaret, who died in 2012, for her contribution and leadership alongside her husband.

"Margaret Whitlam was a leading light for women of her generation. Together they made a difference to our country," he said.

"On this day we honour a life of service to our country."

Former Labor prime minister Julia Gillard described Whitlam as a great leader.

"Mr Whitlam lived on in Australia's universities, its health system, its suburbs, its family law, its relationship with China and its multicultural society," she said in a blog for Guardian Australia.

"I honour Gough as a man of the highest political courage. A giant of his era. He was truly prepared to commit and see what happens. He transformed Australia and we are in his debt."

Current Labor leader Bill Shorten said the party had lost a legend.

"I think it is fair to say regardless of one's politics the nation has lost a legend," he said.

"Gough Whitlam redefined our country and in doing so he changed the lives of a generation.

"His vision, his ambition, offered Australia a new sense of what it might be. Our country is different because of him."