Michael Daley has stood aside as NSW Labor leader to give Bill Shorten the best chance to winning the federal election but has not given up his political ambitions and will renominate for the position in ballot after May poll.

The NSW ALP announced on Monday that a ballot would be held for the position after Saturday night’s bruising election result but deferred the vote until after the federal poll expected in May. His deputy, Penny Sharpe, will act as interim leader.