Opposition Leader Bill Shorten is set for a challenging few months, with a by-election in Batman complicating a critical factional battle playing out in the ALP in Victoria.

There are ructions in the Victorian Right faction, and discontent in the New South Wales Right — both key factional supporters of the Opposition Leader.

The Batman by-election, caused by the resignation of David Feeney for not being able to prove he is not a dual citizen, has thrown up a tricky tactical electoral battle.

All the while, the next federal election is on the horizon and the ALP is anticipating it will be called in the second half of the year.

The Victorian Right

The stability pact that exists between the major Victorian Right and Left factions has been wavering, largely over state political issues.

The Right is fairly evenly split on whether to align with hardline unions in a new deal, or maintain the long-running stability pact that ensures sitting members are not challenged for their seats.

The change would give those on the right greater control of Victorian state politics and open up opportunities to contest federal seats, but in doing so would damage Victorian Labor Premier Daniel Andrews and de-stabilise the federal leader, Bill Shorten.

Back in October, a new deal was on, but it soon fell apart. Now, negotiations have resumed.

The factions met yesterday, with the Left seeking some clarity from the Right on its intentions.

Nothing was finalised, but a new alliance is still a live option.

If the re-alignment proceeds, Mr Shorten faces the prospect of sitting MPs from the Left — including frontbenchers Jenny Macklin and Kim Carr — being challenged for their positions, which could cause a revolt.

One senior Labor figure described the moves as the work of "malcontents out of state parliament" and warned the result of any damage to the long-running stability pact would be "messy".

The New South Wales Right

This faction is aggrieved that its leading man in Canberra, Sam Dastyari, had to resign last year over his connections to Chinese donors.

The wound has not healed, leaving Mr Shorten with yet more disgruntled backers.

But the ructions may pause for now, as the Batman by-election further complicates the picture — in Victoria at least.

ACTU president Ged Kearney, of the Left, is expected to be pre-selected to replace Mr Feeney, who is from the Right, changing the balance of factional representation.

ACTU President Ged Kearney will be Labor's candidate for Batman. ( ABC News Breakfast )

A looming electoral re-distribution is also likely to slow any major moves.

In the meantime, Mr Shorten and the ALP must decide how to handle the Batman by-election campaign.

By-election vs general election

The electoral trends suggest the seat is likely to fall to the Greens candidate, Alex Bhathal.

The Greens can be expected to campaign on progressive, left-leaning issues.

In the neighbouring seat of Melbourne, Greens MP Adam Bandt has already nominated climate change and refugees as key issues in the by-election battle.

Protestors against the proposed Adani coal mine in Queensland (another key issue for the Greens) turned up to Mr Feeney's press conference as he announced his resignation.

As potent as these issues are in parts of the Batman electorate, Labor can ill-afford to rely on campaigning on those issues with the next general election on the horizon.

Doing so would risk accusations of swinging to the left, which is a politically effective attack from the Coalition, as well as leaving the centre ground for them to dominate.

A by-election should — according to one senior Labor figure — focus "on the main game, not side issues".

David Feeney resigned after he could not find confirmation he renounced British citizenship inherited through his Northern Irish father. ( AAP: Lukas Coch )

The campaign

The Liberal Party is not expected to field a candidate in the Batman by-election. There is little incentive to.

At the last election, the Liberal Party's preferencing of Labor ahead of the Greens helped Mr Feeney retain the seat.

With no realistic prospect of winning Batman, the Liberals are not inclined to spend money and resources on a lost cause.

Further, a wafer-thin majority of one in the lower house means there is not much desire to assist Labor in hanging on to a seat.

Labor will also be hampered by the costs sunk into the recent state by-election of Northcote, which it lost to the Greens.

Nonetheless, one senior Labor figure said: "We've got to give it everything we've got."

The ALP is in "a crouching position to leap into the election," the senior figure said, and there was a need to focus "on the main game, not side issues".

A more pessimistic Labor staffer described the by-election, alongside vexing issues such as the Adani coal mine and the citizenship crisis, as a "maelstrom of horror".

"The next six months are going to be really hard and no-one knows where it's going."