Labor leader Bill Shorten has abandoned a tax hike on 20,000 Australian businesses following days of internal pressure and condemnation from the business community.

Members of Labor's shadow cabinet were summoned to Sydney on Friday to finalise Labor's position on the policy after Mr Shorten announced Labor would repeal the tax cuts if elected weeks before they face five byelections.

The tax cuts from 30 to 27.5 per cent for businesses earning between $10 million and $25 million have been in place since July, while cuts for businesses earning up to $50 million were due to begin on Sunday.

Prime Minister Malcolm Turnbull described the back-down as "completely and utterly humiliating" and showed Mr Shorten had "no authority within his own party".

"What he has given today is a vote of no confidence in Australian business and a huge vote of no confidence in himself," he said.