This week, it was David Shearer's turn to have a bad week for a change. 

And it could be argued for Labour that it was a good week to have a bad week. Most Kiwi eyes were fixated on the Olympics. The mainstream media couldn't be bothered to report the renewed ructions within Labour, let alone anything else of political significance (aside from gay marriage). But for politicos, there was plenty of coverage on Labour's own internal eruptions (which aren't yet threatening to upstage the real ones on Mount Tongariro but could soon do so).

Essentially, if you have been living in front of the box over the last two weeks, here's a quick summary of Labour's latest leadership soap opera. A series of bad polls come out showing both Labour and Shearer slumping a bit as National (despite all that has gone against them this year) display some renewed vigour. Then TV3's political duo, Duncan Garner and Patrick Gower, publish blogs stating that two senior Labour MPs (rumoured to be Trevor Mallard and Annette King) are busy slagging off David Cunliffe. This shows that Cunliffe, if anything, is viewed by large sections of his caucas as nothing but a prat and arrogant (at that) but still enough of a threat to be slagged off against. Shearer, meanwhile, quells speculation, circulated by the TV3 duo, that he ain't happy with Cunliffe's performance as regional development spokesperson and plans dumping him. If this isn't enough, Shearer then fuels left-wing anger (including mine) when, during a Grey Power speech, he makes reference to a house painting sickness beneficiary in his electorate. And if that weren't enough, Labour MP Sua William Sio attacked his colleague Louisa Wall's marriage equality legislation by stating that it will lose Labour votes amongst the Pasifika community at the next election.

Essentially, another happy week within the Labour whanau.

This messy situation can't go on for Labour. Shearer's leadership has long been questioned but now moreso. Where to from here for Labour?

There are a number of scenarios that could play out, particularly as Labour heads towards introducing a party-wide electoral college system for selecting its leader.

Here are some key scenarios ranked in order of least likely to occur to most likely:

A.) David Shearer stays as leader, no coup attempt made: probably the option that Shearer and some within the party hierarchy want. They would see any coup attempt as messy and destabilising, particularly at a time when National is experiencing its own issues. I don't see this scenario holding given that Shearer's appearances in the media, while somewhat improved, are still halting. More importantly, he is failing to inspire his frontbench in the House. I think some of his recent House performances have been lacklustre to say the least and have failed to lift morale on his side of the aisle. The best opposition leader performances have, in fact, gone to Russel Norman, Metiria Turei and even (dare I say it on occasion) Winston Peters. Therefore, given this state of affairs, not the most likely option.

B.) David Cunliffe makes loyalty statements, dismisses speculation: once Cunliffe returns from a family holiday next week, he might issue a written statement professing loyalty to Shearer as Labour leader. But if it's a written one, then expect something of a half-hearted affair which no one in the Press Gallery or those within the political know will believe. Therefore, Cunliffe might probably opt to say nothing in the meantime, leading to even further speculation about a possible challenge, all of which will be to his advantage.

C.) Leadership challenge launched early 2013: the most likely scenario. Labour is almost certain to adopt constitutional changes allowing for party-wide leadership elections beginning in 2013. Under the proposed rules, the Labour caucas (as is the case now) will need to confirm or reject Shearer as leader at its first meeting of the year. If caucas re-confirms Shearer as leader, there will be no challenge - at that time. Not an unplausible scenario given that, as has been revealed many times over the years, most caucas members can't abide Cunliffe, as the most likely challenger. However, there could be considerable pressure applied from the party's more traditional grassroots with its MPs to back Cunliffe as a more radical and credible alternative to Key. This pressure will be covertly encouraged by Cunliffe towards year's end and builds up a momentum of its own over the Christmas break. Therefore, when Labour MPs come back from Christmas and provided there is no real opinion poll circuit breaker, then just enough MPs will be forced to swallow their pride and accede to their party membership and trade union base by voting no confidence in Shearer, thereby triggering a leadership ballot. I expect that the first party wide leadership ballot will see the election of a David Cunliffe/Grant Robertson leadership ticket. Shearer will most likely stay on in caucas and could become the party's foreign affairs spokesperson (given his grounding as a UN diplomat) and could hold the post successfully in a future Labour Government. After Cunliffe's ascension, Labour hues a slightly more radical, less-Blairite social democratic policy line to counter a more insurgent, right-wing National-led Government. This will come at a time when rising unemployment and anaemic economic growth beginning to wither away at National's economic credibility making a centre-left victory more likely in 2014.

Clearly, Labour can't afford to hold onto Shearer. He might be trying to tack Labour back to the right, but based on past efforts by Phil Goff (on such issues as race relations and superannuation), these could ultimately fail. After all, National has the right-wing, talkback vote all sewn up and it does wedge politics so much better than Labour can.

The real question for Labour now is: does it have the bottle to bring back real social democratic politics? It can, but only if it goes for option c.