An apparently unrepentant David Cunliffe is understood to have tried to persuade his Labour caucus colleagues he had not acted to undermine David Shearer's leadership when defending himself in a brutal caucus meeting yesterday.
Mr Shearer stripped Mr Cunliffe of his fifth rank and portfolios and sent him to the backbenches yesterday for disloyalty after Mr Shearer sought and received an unanimous endorsement from his caucus colleagues.
Mr Shearer called the urgent caucus meeting after the party's annual conference last weekend, during which Mr Cunliffe repeatedly refused to rule out challenging Mr Shearer and refused to pledge to endorse him in the future.
Sources said Mr Cunliffe angered some MPs in yesterday's caucus meeting by trying to explain his actions away and deny he was trying to mount a leadership challenge.
In return, he was given a brutal drubbing by many of his colleagues in the meeting, described by one MP as "sobering", and from which Mr Cunliffe emerged looking rattled.
He later said he was not able to comment because caucus had decided that only Mr Shearer would speak on the matter.
Mr Shearer will still have to face a formal confidence vote in February, at which he must again secure 60 per cent of his caucus support - 22 MPs or more. Many have not yet committed to him for that February vote.
Some of Mr Cunliffe's supporters - such as Louisa Wall, Nanaia Mahuta, Moana Mackey, Charles Chauvel and Rajen Prasad - could also face punishment but Mr Shearer said he was yet to talk to his colleagues about that.
Ms Mackey and Ms Mahuta were not at the meeting, and it is understood none of the others spoke out in defence of Mr Cunliffe. None would comment after the meeting.
The demotion will upset some Cunliffe supporters and there are concerns it could result in further division within the party. But Mr Shearer said Mr Cunliffe had left him with no alternative after the "disappointing" disloyalty of last weekend.
"That, along with his repeated failure to quell speculation about the leadership, means I no longer have confidence in him," Mr Shearer said.
"He has lost my trust."
He said it was possible Mr Cunliffe could return to a high rank but he would first have to prove he could be loyal. He said he had already given Mr Cunliffe a chance by putting him on the front bench after the pair's leadership battle last December.
Former Labour president Mike Williams said the decision to demote Mr Cunliffe was "a measure of the frustration of the majority of caucus".
MPs would not talk after the meeting, but some gave Mr Cunliffe a public flogging leading up to it, accusing him of undermining both Mr Shearer and former leader Phil Goff.
Yesterday David Parker described Mr Cunliffe's behaviour as "destructive to himself and New Zealand's interests" and Shane Jones likened it to a huhu grub when building a whare: "You've got to toast it or roast it, otherwise your whare will go pirau [rotten] and fall down."By Claire Trevett @CTrevettNZH Email Claire