UPDATE 1-Murdoch's Australia head departs as election battle heats up
* Murdoch appoints new boss of Australian arm
* PM Rudd steps up claims of election bias
* Business, not politics more likely reason for change
CANBERRA, Aug 9 (Reuters) - Rupert Murdoch's News Corp appointed a new chief executive to its Australian arm on Friday, a move Prime Minister Kevin Rudd linked to mounting attacks on his government by Murdoch's local newspapers during a divisive election campaign.
Murdoch named former newspaper executive Julian Clarke to run News Corp Australia, the country's dominant newspaper publisher, replacing former pay TV boss Kim Williams, who announced his retirement after less than two years in the job.
Rudd told reporters the shakeout came after Murdoch sent key lieutenant Col Allan from New York to Australia to increase attacks on his government and its A$38 billion ($35 billion) high speed broadband plan ahead of the Sept. 7 elections.
"The message delivered very clearly to them was 'go hard on Rudd. Start from Sunday and don't back off'," Rudd said on Friday.
News Corp did not respond to requests for comment on Rudd's allegations. Some media analysts said the change of executives was more likely linked to the split of News Corp into its entertainment and publishing arms earlier this year, rather than politics and the heated election campaign.
But there is no question that the Murdoch press in Australia wants Rudd defeated come September's election.
Leading Sydney newspaper the Daily Telegraph on Monday ran a front page headline saying "Kick this mob out" over a photo of Rudd on the first day of an election campaign.
Murdoch's main Queensland daily on Friday continued the anti-government campaign, with a front page headlined "Send in the clown" over a photograph of Rudd and his surprise candidate for a key seat, a former popular state premier Peter Beattie.
Melbourne University media analyst Margaret Simons said News Corp had long been against the Labor government under both Rudd and his predecessor, prime minister Julia Gillard.
"Col Allan's arrival was crucial. I'm hearing Col Allan was sent to report back on how Kim Williams was leading the local operation. When I heard he was arriving, it was clear it couldn't possibly be good for Kim."
"I think the campaign that News is running is being run by the masthead editors, and they are also the ones who have done it for Kim. I think it all has an impact on the campaign."
Crickey.com.au news website said there had been internal unrest in News Corp Australia over Williams cost cuttings and structural changes and relief in newsrooms at his departure.
"I want to thank him for his unwavering commitment and the blood, sweat and tears he has put into News Corp Australia," Murdoch in a statement on Williams' retirement.
Paul Xiradis, managing director at fund manager Ausbil Dexia, the biggest investment manager shareholder in News Corp's Australian-listed shares, said Williams' departure was more likely about business than politics.
"Leading up to it (the News Corp split) there was a fair bit of work involved in that. But now implementing the ongoing strategy, maybe he (Williams) wasn't committed there full-time," Xiradis said.
Simons said the move suggested a cultural shift within Murdoch's media empire, with traditional newspaper executives taking key roles.
"There was a cultural battle going on within the company and obviously this is one of the outcomes," she told Australian Broadcasting Corp.