Labor's national Left faction is on the verge of splitting, with Victorian senator Kim Carr rallying a breakaway group of four federal MPs in response to moves to dump him from the ALP shadow ministry.

The grouping, based in Victoria and dubbed the "industrial left", would constitute a new faction if implemented.

Fairfax Media understands a letter has been prepared for Senator Carr and Victorian MPs Maria Vamvakinou, Lisa Chesters and Gavin Marshall to sign, and trigger the creation of a new factional grouping.

Under ALP rules the group will then demand a position on the frontbench as four MPs is considered a quota, however the national Left is likely to fight this claim.