Michael Daley's decision to step down as NSW Labor leader after a poor showing at the state election was the "right thing" to do, Bill Shorten says.
Mr Daley quit the post on Monday night but vowed to contest a leadership ballot, which head office delayed until after the federal poll due in May.
He said staying in the position would have been an unnecessary distraction from the task of trying to elect a federal Labor government.
Mr Shorten denied he pressured Mr Daley into stepping down but says he did admonish him for his comments about Asian immigration, which emerged in the final week of campaigning and proved severely damaging.
"I think he's actually done the right thing and stepped down, showing some recognition and acceptance of the result on Saturday," he told reporters in Sydney on Tuesday.
"He's the one that made the final decision. I did make it clear, though, that those comments (about Asian immigration) shouldn't have been said."
The federal opposition leader said he was confident NSW Labor will regather and rebuild after Saturday's result.
But he doesn't think it'll have an impact on the party at the federal election.
"I think the federal election will decide on federal issues," Mr Shorten said.
"There is no cloud because frankly all the processes that go into the NSW state election leadership have been put on hold until after the federal election."
Australian Associated Press