Baillieu quits as Premier

Former opposition leader Denis Napthine is the state’s new Premier after Ted Baillieu resigned under internal pressure and after the shock resignation of embattled MP Geoff Shaw.

• Josh Gordon: One departure leads to another - Baillieu's
• Spotlight on Shaw before it moved to bigger things
• Reaction: Baillieu a man of integrity
• Big Ted's strength proves to be weakness
• Transcript: Denis Napthine's statement
• Transcript: Geoff Shaw's statement
• Transcript: Ted Baillieu's full statement
• Editorial: Baillieu's downfall of his own making

Mr Shaw, who is facing a police probe for misuse of his government car, quit the parliamentary Liberal Party on Wednesday morning, kickstarting a frenzy on Spring Street that reached fever pitch just before 7pm after he finally released a statement.

"I believe my actions reflect the general loss of confidence Victorians are feeling in the leadership of the government," Mr Shaw said.

An ashen-faced Mr Baillieu entered a special Liberal-only meeting at 7pm, and minutes later it was confirmed that he had resigned as premier. He will remain in Parliament as the member for Hawthorn.

Mr Baillieu and his wife Robyn leave Parliament.Credit: Wayne Taylor

Holding back tears, Mr Baillieu made a statement to reporters – but took no questions – and spoke passionately for his love of Victoria and the job.

"I love this state, I love the Liberal Party and I love this role that I have had the honour to enjoy over the last two and a bit years," he said.

"It is apparent to me that a change of leadership is in the best interests of the government. I wish Denis Napthine the best. He has my full support. He’s an outstanding individual."

Earlier, Mr Baillieu had endured a special Coalition meeting over Mr Shaw’s resignation, emerging confident of his leadership.

Dennis Napthine speaks to media after succeeding Ted Baillieu as Liberals leader.Credit: Pat Scala

Mr Shaw remained in Parliament during the day but did not attend the lower house. He was seen in the MPs’ cafe and avoided journalists’ questions. Late in the day he was seen with backbencher Murray Thompson and several others.

The Baillieu government had been rocked by scandal this week over fresh revelations regarding Tristan Weston, the former police adviser to Deputy Premier Peter Ryan, and secret recordings of conversations he had with Mr Baillieu’s chief of staff, Tony Nutt, and Liberal Party state director Damian Mantach.

Mr Baillieu referred the case to the new Independent Broad-based Anti-corruption Commission.

Facing poor polls for nearly a year, leadership speculation has been bubbling, with Planning Minister Matthew Guy most often named as the next in line.

Government MPs were tight-lipped last night about what happened in the meeting and whether Dr Napthine, who turned 61 on Wednesday, was elected unopposed. There were some reports that both Mr Guy and Community Services Minister Mary Wooldridge also stood for the job.

Dr Napthine dodged questions about the details of the leadership change or what occurred in the party room, or how he would explain the change to Victorians.

''I don't comment on the activities within the party. I don't comment on decisions on the conduct of issues in the party room. This is not what I expected when I had my bowl of Special K this morning,'' he said.

He said the decision had been made by Mr Baillieu, whom he described a great friend.

''The people of Victoria will understand what has happened and the people of Victoria will make their own judgments over the next weeks and months.''

Deputy Premier Peter Ryan, who is personally very close to Mr Baillieu, remains at his post.

Opposition Leader Daniel Andrews said Victorians should not be fooled that this was a fresh start, as Dr Napthine had been sitting at the cabinet table while the Coalition cut funding to education and health.

He said Victorians would be shocked and dismayed that Dr Napthine was premier.

''This is a birthday gift to the birthday boy. It is not an honour. It is not an entitlement won through an election,'' Mr Andrews told reporters on Wednesday night.

''It is always preferable for the community to choose the leader of this state.''

On what was a chaotic day, Dr Napthine's first press conference was interrupted by a vote in the lower house that he had to attend. He sat in the premier's chair, with Mr Baillieu filling Dr Napthine's old spot on the front bench.

Dr Napthine, a former veterinarian who was first elected in 1988, said he ''looked forward to providing strong, stable and positive government for the people of Victoria''.

He is facing a tough challenge with the workability of the Parliament still unknown. The Coalition technically holds a one-seat majority due to Labor MP Tim Holding's retirement, but with Labor expected to win his seat, Mr Shaw's vote as an independent will be a casting one.

Dr Napthine said he had had no discussions with Mr Shaw about support for the government.

Dr Napthine was opposition leader after Jeff Kennett resigned as leader in 1999 but was toppled by Robert Doyle in 2002 after months of destabilisation by Mr Doyle, who is now lord mayor of Melbourne.

The new Premier, who is the member for South-West Coast, said Mr Baillieu had put ''his heart and soul into the Victorian Liberal Party … for the best part of three decades''.

Federal Liberal leader Tony Abbott said on Wednesday night that Mr Baillieu had put Victoria's finances on a sustainable footing and had made significant investments in infrastructure.

Mr Doyle said: ''I am very happy to work with him and I will support him at 100 miles an hour.''

A senior Liberal Party source said that ''they've betrayed all of us, they make us all look like fools''.

With Henrietta Cook and Tom Arup