Rudd demanded that opposition leader Malcolm Turnbull withdraw support for renegade backbencher Wilson Tuckey, who said there were "narrow odds" some of the rickety vessels harboured terrorists.
"I think these are deeply divisive, disgusting remarks and they do not belong in any mainstream Australian political party," Rudd said.
"I think Mr Turnbull should show some leadership, and withdraw his support for Mr Tuckey's pre-selection as a Liberal candidate for the next election.
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Turnbull accused the prime minister of trying to draw attention away from the steep rise in asylum-seekers, which has reignited Australia's bitter immigration debate.
"The prime minister, in an outburst of contrived indignation, seeks to distract attention from the comprehensive failure of his border protection policies," the opposition leader said.
Border guards stopped another two boats carrying 56 people, taking the number to some 35 vessels this year mostly carrying people fleeing hotspots like