David Parker has been confirmed as deputy leader of the Labour Party.



''David Parker will make an outstanding deputy,'' leader David Cunliffe said in a statement.



''He is a man of intellect and integrity, with the Labour values of opportunity and fairness at his core. I could not be happier with his elevation.



Parker will remain as the party's finance spokesman, with Grant Robertson taking the employment portfolio, and Shane Jones remaining as economic development spokesman. Sue Moroney will be senior whip, with Iain Lee-Galloway as junior whip.



The reshuffle means Chris Hipkins and Danien Fenton have been dumped from their roles as whips, although Cunliffe thanked them for their "enormous contribution".



A full caucus will come in the next week, Cunliffe said, after he had held one on one meetings with all the Labour MPs.



"But it was important to get our senior leadership roles confirmed as soon as possible so that we can continue to take the fight to National,'' Cunliffe said.

While Parker had been confirmed in the deputy's job, sources had previously confirmed to Fairfax Media that the job was Robertson's if he wanted it and that Cunliffe had sounded him out for the job.



But the situation may be muddy, with others suggesting it was not clear cut whether Cunliffe had asked Robertson to take the job.



Neither man would confirm today whether Cunliffe had directly offered Robertson the position.



A source said this morning there had never been any direct offer to Robertson of the deputy leadership and that Parker appeared to be his first choice.



Robertson's decision not to take the job will re-start speculation about Cunliffe's ability to unite a previously divided caucus, after winning the leadership vote despite failing to get the backing of a majority of MPs.



His leadership was aided by overwhelming backing from the unions, and rank and file.



Cunliffe, confirming Robertson would be Labour's Leader of the House, would not confirm he had offered the deputy leadership to Robertson.



He would only say that he had "sounded out" Robertson on his preferences.



Robertson would not say either if Cunliffe had offered him the job, or if he would have taken the job if offered.



"I hadn't made any decision about that," he said.



"I had some good discussions with David yesterday."



Mallard was expected to be in Cunliffe's sights after being widely considered leader of the "Anyone But Cunliffe" - or ABC - club opposed to his leadership. Another who may be demoted is former Labour leader Phil Goff.



Caucus voted on the deputy leadership this morning and had been expected to endorse Parker unanimously.

RIFTS IN PARTY: KEY

MAARTEN HOLL NEW DEPUTY CHOICE: David Parker (left) is expected to be confirmed as the new Labour Party deputy leader. With him are Shane Jones, David Cunliffe, and Grant Robertson.

Parker's promotion emphasised the rifts within the Labour caucus, National Party leader Prime Minister John Key said today.

Key said that to succeed, Labour needed to unite the opposing factions "and essentially they've failed to do that".



"What that sort of shows you is the Robertson camp isn't really backing David Cunliffe so that will spell problems I think, for him over time," Key said, adding the same had happened with David Shearer who was undermined during his leadership reign.



Those divisions would emerge as Cunliffe tried to rally a caucus which he had not managed to win over in Labour's leadership contest, and which was thought to contain a number of MPs who strongly dislike him.



Key said that to make the party work, Labour needed to have Cunliffe and Robertson - "the yin and yang" - together on the same page, but "the yang is sitting out there probably plotting as we speak".



"[Cunliffe] might look slicker on top but it's a band aid over a very divided party," Key said.



While he said he liked Parker personally, he was not concerned about his elevation to deputy leader or his potential impact on the Government.



"He's very pointy-headed, can't communicate with the public very easily, [and] will be no match for Bill English," Key said.



Labour had also discarded one of its better weapons, Key said, with the demotion of known-Cunliffe opponent Trevor Mallard, who was replaced as Leader of the House by Robertson.



"Trevor Mallard, love or hate the guy, he knows the House inside out, so that will be another sort of agitating force and there are others - we know that Phil Goff and Annette King are really opposed to David Cunliffe," he said.



Mallard was an "acquired taste" but had been an effective tool for Labour.



"I don't actually agree with a lot of things he said and half the time I think he makes them up, but nevertheless political parties have attack dogs and he's been their big attack dog."

IMMEDIATE ACTION: New Labour leader David Cunliffe prepares for first caucus meeting.