David Cunliffe has emerged as the new Leader of the Opposition after winning the clear backing of the public and unions, but not of his Labour Party caucus.
Labour's general secretary Tim Barnett said Cunliffe was elected by a majority in the first round of the three-way electoral college and said this gave the race clarity.
Cunliffe had received 51.15 per cent of the vote, followed Robertson on 32.97 per cent and Shane Jones on 15.88.
As expected, Robertson pulled the majority of caucus support with 47.06 per cent followed by Cunliffe on 32.35 per cent. Jones had 20.59 per cent support.
Cunliffe drew the most support from the wider party, at just over 60 per cent followed by Robertson at just under 27 per cent and Jones on 13 per cent.
Cunliffe was the overwhelming union favourite, taking almost 71 per cent of their vote.
The election process had been an "outstanding success" in terms of revitalising the party, Barnett said from Fraser House in Wellington where the announcement was made at 2.50pm.
"With this leadership election the Labour Party he embarked on and delivered a new and exciting and democratic process,'' he said.
''In terms of party and public and party engagement it has been an outstanding success, it has unified the Labour Party and energised our grass routes.''
Barnett said there had been a high turnout from Labour members throughout and "Labour is stronger as a result".
At David Cunliffe's electorate office a huge cheer erupted as it was announced the MP had won the Labour leadership race.
Cunliffe had just arrived with wife Karen Price to address the crowd after the news was announced.
MPs Iain Lees-Galloway, Rajen Prasad, Sue Moroney, Carol Beaumont and Moana Mackey were at Cunliffe's New Lynn electorate office to hear the announcement, along with dozens of supporters.
Party President Moira Coatsworth told the crowd Cunliffe had won with a clear majority to more cheers.
"David has been elected by a robust and democratic process and won on the first round with a clear majority. This gives him a strong mandate as leader and he has the full support of the Labour Party."
Cunliffe had the leadership skills and vision "to win the trust of New Zealanders and take Labour to victori in 2014," she said.
She introduced Cunliffe to his supporters as the next prime minister of New Zealand.
"I have no doubt he will go on to become a great Labour prime minister who builds a stronger, fairer and more sustainable New Zealand."
Cunliffe told the crowd his election represented a new beginning for Labour and for New Zealand.
"This contest has been a win for Labour and all those New Zealanders who currently don't have a voice."
He paid tribute to Grant Robertson and Shane Jones.
Robertson was a clear favourite of the caucus, getting 47 per cent support compared to Cunliffe's 32 per cent on the first count.
Cunliffe said he believed every member of the Labour team would put the cause first.
"When we do we will win and when we win we will change this country. Our people have spoken. They have entrusted to all of us to join together and fight for a better future for all New Zealanders.
''Tomorrow morning would be the start of Labour's campaign against the Key government,'' Cunliffe said.
There was no indication yet of who would be deputy leader.
Labour's public show of new-found unity could be just skin deep with some fearing blood on the floor within days of the new leader taking office.
Cunliffe could have an uphill battle winning over a hostile caucus after Robertson was confirmed as having the most support there.
One MP earlier warned that Cunliffe's first days in the job would be crucial: "I reckon we will know in the first week or so how it's going to go. If he can't bring the group together then he's shot."
Camp Cunliffe insiders expected he would extend an immediate olive branch to rivals, retaining Robertson in the crucial deputy's position if he wanted it. A source within Cunliffe's team also expected there to be a number of Robertson supporters retained in senior portfolios.
This suggested Cunliffe would adopt a similar strategy to Prime Minister John Key when he was appointed leader of the Opposition. In a day-long strategy session at his Parnell home with leadership rival Bill English, Key divvied up front-bench positions and caucus rankings in a deal that secured unity.
This was also the successful strategy used by former Labour leader Helen Clark to unite warring factions after she promoted the leaders of an uprising against her.
But any attempt at brokering unity could come unstuck if Cunliffe attempts to appoint a whip over the incumbent Chris Hipkins, who publicly tore strips off Cunliffe after Labour's divisive annual conference last year. The whip's position is usually only held by someone who has the full trust and confidence of the leader and there are rumours Cunliffe has promised the position to Palmerston North MP Iain Lees-Galloway.
But the position can only be changed by the caucus, leading to a potentially bloody battle between Robertson supporters and Cunliffe if Hipkins refuses to stand down.
There could also be acrimony if Cunliffe demotes the so-called "old guard" - Annette King, Trevor Mallard, Phil Goff and Ruth Dyson - whom Camp Cunliffe accused of running the campaign against him during the last leadership spill.
- © Fairfax NZ News
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