Labour MPs have agreed to rule changes that will give grassroots members and supporters a say in who leads the party and give more clout to locals in picking electorate candidates.

They would also revamp party list selections to allow a more "strategic" approach to the mix of candidates.

The draft changes come after a broadside from West Coast- Tasman MP Damien O'Connor, who shunned the list last year, saying selection was dominated by "self-serving unionists and a gaggle of gays".

He later apologised for the outburst, but his comments helped spark the rethink.

Speaking after a two-day caucus retreat in Waitangi yesterday, Labour leader David Shearer said MPs were committed to granting members a say in picking the leader, though the mechanics were yet to be finalised. The party's ruling council would also look at the draft changes this weekend, followed by further caucus consideration.

Under the current rules MPs alone pick the leader.

"Caucus will be one proportion of the votes cast," Shearer said.

It is understood MPs are likely to retain 40 to 50 per cent of the votes, but it is not clear if they will be cast as a bloc or by individual MPs. Members will probably have about 40 per cent of the vote, with affiliates - such as unions, Maori, and the youth and rainbow wings - making up the rest of the vote.

Two or 3 per cent would be set aside for registered supporters who are not members.

The party is wrestling with ways to ensure that a leader who is unpopular among the MPs is not forced on the caucus, while making the membership vote meaningful.

A leadership vote would be triggered by the resignation of the leader or a vote of no confidence by the caucus.

At electorate level the proposal would cut the power of the central party hierarchy. It would see seats with strong membership numbers given a greater proportion of the votes on the selection panel than the head office appointees.

That could give a local electorate four votes, plus one "floor vote" cast by those present at a selection meeting, against just three head office votes.

The list selection process would also change, giving a smaller group the final say to ensure a more "strategic" mix of candidates on the list. At the moment a large "knitting committee" makes the final call after regions rank their preferences.

That has raised concerns, such as those aired by O'Connor, because different groups or electorates push their favourites.

- © Fairfax NZ News