Australian Prime Minister Julia Gillard has issued an "unreserved apology" on behalf of the Australian people to those affected by the country's former forced adoption policy.

A senate inquiry found that about 250,000 children were removed from unmarried mothers in Australian hospitals shortly after their births in the 1950s, 1960s and 1970s and given to childless married couples.

Many women said they were coerced into signing away their children.

Ms Gillard made the apology at Parliament House in Canberra in the presence of more than 800 people affected by the policy.

They cried and cheered as they listened to Ms Gillard and responded with a standing ovation when it was finished.

The prime minister told the audience that the policies had "created a lifelong legacy of pain and suffering".

"We acknowledge the profound effects of these policies and practices on fathers and we recognise the hurt these actions caused to brothers and sisters, grandparents, partners and extended family members," she said.

"We deplore the shameful practices that denied you, the mothers, your fundamental rights and responsibilities to love and care for your children," she added.

Ms Gillard committed AUS$5m (€4m) to support services for affected families and to help biological families reunite.

Meanwhile, Minister for Communications Pat Rabbitte has told the Dáil that there is no legislation planned for a State inquiry into illegal adoptions in Ireland.

The matter was raised during the Order of Business by Sinn Féin's Aengus Ó Snodaigh, who claimed that it was an emerging issue as a result of reports into Magdalene Laundries.

Noting today's apology in Australia to those affected by illegal adoptions there, Mr Ó Snodaigh asked if there were any plans to hold a similar inquiry in Ireland, which would look at the falsification of adoption records.

Mr Rabbitte said that while he was not an expert in the area, there was no legislation promised on the issue.

Gillard survives Australian leadership challenge

The Australian apology came hours before Ms Gillard stared down a leadership crisis and ensured she will lead the government until elections in September.

Her chief rival, Kevin Rudd, said he did not have enough support to replace her.

Ms Gillard has now defeated Mr Rudd for the leadership three times.

However, she needs to unify a deeply divided party and turn around opinion polls, which show her government will be easily defeated in the general election.

Ms Gillard was re-elected unopposed, while Treasurer Wayne Swan was re-elected deputy prime minister unopposed.

Ms Gillard's leadership has been under threat for most of the past two years as her minority government lumbered from one crisis to another.

This is despite the fact that the economy has seen 21 years of continuous growth and avoided recession after the 2008 global crisis.

She has failed to arrest a slump in opinion polls, which predict a major defeat in September with her party losing about 20 seats in the 150-seat parliament.