A factional fight in the Victorian branch of the ALP has plunged Bill Shorten’s home base into turmoil, compounding internal difficulties for the opposition leader after the ALP’s loss in last weekend’s Bennelong byelection.

Representatives of the right faction in Victoria on Tuesday failed to reach agreement about whether to back a proposed power realignment with elements of the left, including the construction branch of the Construction, Forestry, Mining and Energy Union, which would impact both state and federal preselections, including a newly created federal seat in the north-west of Melbourne.

A breakaway group of right and leftwingers want to overturn a stability pact agreed between the former rightwing parliamentary powerbroker Stephen Conroy and the veteran leftwinger Kim Carr, which has maintained factional harmony in the Victorian branch for several years.

The shift, Labor sources say, is being spearheaded by Adem Somyurek, who was a minister in the Andrews government before being dumped. Somyurek, according to internal accounts, is attempting to assert himself as the kingmaker in the Victorian right.

But the rebellion faces stiff resistance from elements of the left. Elements of the industrial right, including the National Union of Workers, and the shop assistants union, are also said to be unconvinced the realignment is a good idea.

A meeting of rightwingers declined to endorse the new arrangements, deferring further discussion until after the Christmas break.

A number of Victorian Labor sources have expressed dismay at the outbreak of factional jostling, with one characterising the recent developments as “pure madness”.

“The inevitable consequence of all this is massive instability in the branch,” one Labor insider told Guardian Australia.

As well as overturning agreements on preselections in both the state and federal arena, threatening the positions of some current parliamentarians, some suggest the push is related to efforts to give the right faction and, by extension, Shorten additional influence in party forums, like the national conference, through the newly created factional alliance.

The Labor right has controlled Labor’s national conference since 1984 but the last federal gathering in 2015 saw the forum on a knife-edge, with the right controlling 197 votes, the left 196, with four nominally non-aligned votes forming a crossbench.

Trouble for Shorten on the home front follows Labor’s failure to win the Sydney seat of Bennelong in a critical byelection last weekend, despite the recruitment of a star candidate, the former New South Wales premier Kristina Keneally.

Labor insiders readily concede the party underperformed in the Sydney contest given national opinion polls show voters are disaffected with the Turnbull government.

Internal relationships federally have also been stirred up by the controversy surrounding Sam Dastyari and his departure from politics because of links with Chinese political donors.

Dastyari is a significant institutional figure in the party’s NSW right faction and colleagues from that faction have made it clear they were not happy with the departure.