Heather Roy has been dumped by the ACT caucus as the party's deputy leader, stripped of her ministerial portfolios and replaced with first-term list MP John Boscawen.
Mrs Roy is not talking about her demotion or the loss of her portfolios and is on two weeks' leave from Parliament. ACT leader Rodney Hide says she will use that time to reflect on what has happened.
At a news conference at Parliament on Tuesday afternoon, Mr Hide repeatedly refused to comment on why Mrs Roy was rolled.
"John Boscawen put his hand up to be deputy leader. That required a vote in the caucus. A vote was had. John Boscawen succeeded in becoming deputy leader. They're the facts."
There has been ongoing tension between Mr Hide and Mrs Roy, who is believed to have angered him by questioning his role ahead of the 2011 election.
Mr Hide on Tuesday would not comment on whether Mrs Roy was destabilising the party. He says ACT wants to put the best team forward to contest the election and hopes Mrs Roy will see out the parliamentary term.
Mr Hide says he has spoken to Prime Minister John Key and they have agreed Mr Boscawen will pick up the ministerial portfolios of Consumer Affairs and Associate Commerce. Mr Hide will pick up an additional role as Associate Education Minister.
Mr Key says he has no idea why Mrs Roy was removed as the party's deputy, but the ructions within ACT are no threat to the stability of the National-led Government.
Mr Key says whatever troubles the support party is having, he is confident ACT MPs will vote with National and that his government's numbers are secure.
Former ACT MP Stephen Franks on Tuesday ruled out a leadership challenge as the reason behind the decision to remove Mrs Roy.
Mr Franks will not comment on what was discussed at the caucus meeting, but says Mrs Roy did not have leadership ambitions.
Boscawen sought role
Mr Boscawen says it was his decision to challenge Mrs Roy for the position, but will not say why he believes he will be a better deputy.
He says he is looking forward to the job, which will be a huge challenge.
"I think it's very important that the ACT party succeed and grow its number of MPs at the next election. I'm very grateful to have the support of the caucus and the board to be elected deputy leader."
Prime Minister John Key said earlier he had already ruled out working with ACT MP Sir Roger Douglas, whom he says has a far-right wing agenda that does not sit well with a centre-right government.