Federal Opposition Leader Bill Shorten has succumbed to party pressure and backed down on his plan to scrap company tax cuts for medium-sized businesses.

Key points: On Tuesday, Bill Shorten said a Labor government would repeal the Coalition's company tax cuts for businesses with a $10–50 million turnover

On Tuesday, Bill Shorten said a Labor government would repeal the Coalition's company tax cuts for businesses with a $10–50 million turnover Friday morning Labor sources told the ABC Mr Shorten would be asked to "walk back" the policy at a shadow cabinet meeting

Friday morning Labor sources told the ABC Mr Shorten would be asked to "walk back" the policy at a shadow cabinet meeting After the meeting Mr Shorten said it had become clear the plan was "creating great uncertainty", so the position was "amended"

Earlier this week Mr Shorten said a Labor government would repeal corporate tax cuts for businesses with a turnover of between $10 million and $50 million.

But Mr Shorten has now said that he would not repeal tax cuts that are already coming into effect.

"I now accept that simply stopping at $10 million would have created more confusion, uncertainty," he said.

The quick policy change comes after Labor sources told the ABC on Friday morning that Mr Shorten would be asked to reverse his decision at Friday's shadow cabinet meeting.

The shadow cabinet's decision means that businesses between $10 million and $50 million will keep their tax break.

It means Labor will not go into the next election promising to increase company tax that has already fallen.

But a clear distinction will remain between Labor and the Coalition because the Opposition will not back the further round of cuts that would see the corporate rate eventually fall to 25 per cent.

Speaking to the media after the meeting, Mr Shorten said Labor remained committed to scrapping tax cuts for "the big end of town".

He said it had become clear in recent days that the plan to repeal the cuts for businesses with turnover of between $10 and $50 million was "creating great uncertainty".

"So today I and our colleagues have decided to amend our position," Mr Shorten said

He denied he had been humiliated or rolled by his shadow cabinet colleagues.

But he conceded it would have been better if he had made this announcement on Tuesday rather than having days of confusion.

"The fact of the matter is that we have got to it now, so we're going to move on," Mr Shorten said.

But Prime Minister Malcolm Turnbull called it "completely and utterly humiliating" and said it showed the Opposition leader had no authority within his own party.

"He can't keep the same policy position for a week," Mr Turnbull said.

'Smart politicians don't just lead, they listen'

The Labor leader said he was "not too arrogant" to listen to companies and colleagues who had been making the point to him that already legislated tax cuts should stand.

"We do recognise calls in recent days that if a tax reduction has already been implemented and companies are paying that lower tax rate now we did not want to cause confusion and uncertainty to those businesses," Mr Shorten said.

Mr Shorten said he had heard the concerns of colleagues who opposed the idea.

"That's what we've done today because smart politicians don't just lead, they listen," he said.

It is a major policy change for Labor after days of uncertainty following Mr Shorten's one-word policy announcement on Tuesday that Labor would repeal already-legislated cuts.

Shadow Treasurer Chris Bowen said it struck the right balance.

"It respects tax cuts which have been legislated and implemented," he said.

"Any business which has received a tax cut has factored it in, will continue to receive it under a Labor government."

Some in Labor had been concerned that the tax decision announced by Mr Shorten on Tuesday and now reversed would have damaged the ALP's chances in upcoming by-elections.

Mr Shorten was challenged by a journalist on whether he should quit the leadership if he lost either of the seats of Longman or Braddon.

He said he did not accept that Labor would lose the by-elections, "but I am not going to be so arrogant as to declare victory".

The Council of Small Business Organisations (COSBOA) welcomed Mr Shorten's backdown but also urged Labor to go further and agree to eventually cut the tax rate to 25 per cent.