David Shearer's leadership appears fatally wounded after a his party yesterday voted to give a minority of MPs the power to bring him down.
Rival David Cunliffe is now positioning himself for a challenge in February after yesterday refusing to endorse Shearer's leadership.
In scenes not witnessed since the David Lange versus Roger Douglas years, anger spilled out during yesterday's Labour Party conference in Auckland, with the wider party membership effectively punishing MPs for ignoring the grassroots' clear choice of Cunliffe for leader in a runoff last year.
In what was effectively a vote of no confidence in Shearer by the wider party membership, a rule change was passed by 264 votes to 237 allowing 40 per cent of the caucus - just 14 MPs - to trigger a leadership runoff.
It gives Cunliffe the green light to mount a leadership challenge even though a majority of caucus don't back him.
Divisions within Labour were laid bare by the vote, which also gave the party's union backers and grassroots activists the deciding say in who should lead the party.
In an electoral college for the leadership 40 per cent of the votes would be cast by MPs, 40 per cent by members and 20 per cent by unions.
A leadership vote in February is now mandatory because of the rule change.
The change followed impassioned calls for Labour's rank and file to take back power from the MPs.
"Today is the day the membership takes the party back," was the rallying cry from one delegate.
Shearer ally Chris Hipkins hit back in anger, labelling the move undemocratic.
Labour could find itself in the extraordinary situation of an unwilling caucus having a leader imposed on it by the wider party membership.
Amid signs Shearer's leadership has become increasingly polarising within the party, the debate forced criticism of his poor performance into the open.
List MP and former party president Andrew Little urged delegates not to treat the rule change as a protest vote.
"Let's name what some people are motivated by here. That is contemporary anxiety about leadership."
Shearer is not just facing a revolt among his wide party members - MPs including Christchurch East's Lianne Dalziel and Manurewa MP Louisa Wall also spoke up for the rule change, in a sign they are backing Cunliffe.
Other MPs, including Nanaia Mahuta, Charles Chauvel and Sue Moroney, are known supporters.
During last year's leadership vote, Cunliffe was believed to have about 12 votes in caucus to Shearer's 21.
Cunliffe's camp has argued the vote was much closer.
Shearer yesterday insisted he still had the backing of caucus, even under the rule change.
"I have absolute confidence, I can tell you quite assuredly, I will be the leader in 2014 that takes Labour into government."
He refused to say whether Cunliffe would be disciplined for refusing to rule out a challenge and insisted he had no reason to doubt Cunliffe's loyalty.
"He gave me his loyalty last week . . . I can only take him on his word."
Cunliffe yesterday insisted that Shearer had his support as leader but he refused to answer directly when asked repeatedly if Shearer was the right person to lead Labour to the 2014 election.
He also refused to answer directly when asked if he thought he was the right person to lead Labour to the election.
"That is an entirely hypothetical question."
Labour deputy Grant Robertson, who is seen as another possible contender for the leadership, insisted the vote was not a victory for the Cunliffe camp and said he believed Shearer was doing "an excellent job".
- Sunday Star Times
Are you happy with the council rates revaluation on your home?