Swansea MP Yasmin Catley staffer stood down after allegedly distributing 'dirt file'

Chris Minns quit as Labor's transport spokesman on Wednesday after his position on the front bench became "untenable" but he says he has no immediate plans for a tilt at the leadership.

The Kogarah MP issued a statement on Twitter a day after shadow treasurer Walt Secord resigned, saying he could no longer serve under leader Jodi McKay.

There's now speculation that could open the flood gates for other Labor MPs to follow suit but Ms McKay insists she has the support of caucus and isn't budging.

She said Labor's falling vote in the Upper Hunter by-election - from 29 per cent in 2019 to 21 per cent last weekend - was matched by a fall in the victorious National Party's falling vote, and wasn't unexpected.

National's first-preference vote fell from 34 per cent to 31 per cent.

"It was a by-election we were never going to win, a seat we haven't held in 90 years - there were rumblings from a quarter that has always had rumblings, that wasn't successful twice before," Ms McKay told Sydney radio 2GB on Wednesday.

The office of Ms Catley - the Labor deputy leader - has been accused of distributing a "dirt file" on Mr Minns on Tuesday, prompting his later resignation.

Ms McKay insists neither she nor Ms Catley knew anything about the dossier and the staffer who distributed the file has been removed.

IN OTHER NEWS:

The leader also said she respected Mr Minns' decision, adding he was a "decent person".

Mr Minns says while he has no immediate plans for a tilt at the top job he "needed to speak to his colleagues".

"The Labor party over the last two years has been too negative ... I don't think negative politics works," he told reporters on Wednesday.

"There's a real space for NSW Labor and social democratic parties around the world to come up with answers to the problems facing working families.

"My message today is we need to be more optimistic and more positive about politics and the way we approach politics and what we say to the people of NSW - not turn on each other and certainly not attack each other."

The dossier circulated about Mr Minns prompted Mr Secord to be the first to quit the front bench while arguing Mr Minns would be a better opposition leader.

Mr Secord said it was well known he had disagreed with Ms McKay on "policy, parliamentary and strategic decisions and directions" over the past two years.

Yet the path to leadership for Mr Minns could be difficult unless Ms McKay was persuaded to resign.

Since 2013, Labor party rules require 60 per cent of the caucus to vote to unseat an opposition leader as well as a vote by the party's members.

Ms McKay beat Mr Minns for the Labor leadership after the 2019 election, with 29 caucus votes to Mr Minns' 21.

The opposition leader also noted the coalition government had enjoyed the advantage of incumbency during the COVID-19 pandemic.

"If someone has support greater than mine, if someone believes they have the support of the party to do this, I'll always put the party first," Ms McKay said.

"The fact is, with great respect to Chris, he doesn't have that ... (and) we need to do everything we can to try and bring this party together.

"I acknowledge I'm not popular like Gladys Berejiklian but I can look myself in the mirror every day and tell myself I've never turned a blind eye to corruption."

Our journalists work hard to provide local, up-to-date news to the community. This is how you can continue to support us: