**UPDATED**Chris Carter has been suspended from the Labour Party caucus and his future with the party is on incredibly shaky ground, over letters which were delivered to members of Parliament's press gallery this morning claiming Phil Goff would face a leadership challenge.
The letters claimed Mr Goff and deputy leader Annette King would be voted out next week and the MP often touted as future leader, David Cunliffe, would leave the leadership vote "with a smile on his face".
Mr Goff says when he confronted Mr Carter, the longtime MP admitted he was responsible for the letters and their distribution. He says the Labour caucus then met and unanimously voted to suspend Mr Carter.
"As of now Mr Carter is no longer a member of the Labour Party caucus. The New Zealand Council of the Labour Party will shortly consider his membership of the Labour Party itself," Mr Goff says.
"The content of his letter, while not true, was designed to damage the party I lead. It was stupid and disloyal. His actions breached caucus rules and were calculated to damage the party and the leadership. This is unacceptable to me and my caucus."
"Chris Carter has no future in the Labour Party I lead."
Mr Goff says his decision to suspend the gay MP comes just weeks after he offered him a chance to rehabilitate himself following issues around his frequent travel and excessive expenses.
When questioned by journalists, Mr Goff said perhaps Mr Carter's motivation for the letters was retaliation over the expenses affair.
It's now up to Mr Carter to decide whether he quits Parliament and forces a by-election in his Te Atatu electorate.
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