Kirklees Council has no elected leader.
In a sensational turn of events, the leader elect, Clr Shabir Pandor, could not gather the support needed to take up the top job.
He becomes the first leader of the biggest party to fail to secure leadership of Kirklees Council.
The council is temporarily led by chief executive Adrian Lythgo.
The surprise coup caused a split in the party with three of Clr Sheard's supporters deciding to stay away for the crunch vote.
Councillors Graham Turner, Cathy Scott, Judith Hughes and Clr Sheard himself were all absent.
Opposition parties, who normally acquiesce to the leader of the largest group, turned on Labour and voted Clr Pandor's leadership bid down.
Despite support from one Independent councillor, Labour were out voted by 33 votes to 31.
Prior to the vote Clr Pandor was subjected to a brutal onslaught of criticism by all three opposition leaders.
In his nomination speech, Clr Pandor urged his council colleagues to "vote for change".
He appealed for those who planned to vote against him to change their minds, saying: "...if you don't this council will always be in the same place."
But his words fell on deaf ears as Conservative, Lib Dem and Green leaders laid into his credentials to take the top job.
Local government reporter Nick Lavigueur reports on Clr David Sheard being ousted as Labour leader
New Tory leader, Clr David Hall, said Labour's bloody coup after the local elections meant they had lost their mandate to automatically elect their leader as council leader.
And he claimed Clr Pandor had made a number of false promises to his own members about deals with other parties.
He said: "This council needs a leader who possesses wisdom above cleverness. It needs a skilled negotiator not a wheeler-dealer."
This organisation expects a leader who can steer it through the most extensive re-structuring in the history of its existence...
"Sadly the nomination before us cannot even command the support of his own group, and so cannot expect to command the support of others.
"If we elect an ill-suited person to this job we demean the office itself."
Lib Dem leader, Clr Nicola Turner, also said Clr Pandor had made a number of promises he couldn't keep.
"He's moved the goalposts, shifted the sands, so many times it almost made me dizzy," she said.
"If you can't get your own party to follow you how can you ask me to do that with my party."
Green leader, Clr Andrew Cooper, said trust was vital for any new leader.
And he revealed that Clr Pandor had told his Labour colleagues that he had secured Green Party support for the crunch vote when he had not.
"If the leader can't tell the truth to his own colleagues how can he be trusted with the leadership of the council," he said.
"This is a bid of personal ambition, fuelled by promises and secured by patronage.
"It cannot stand, it cannot be supported.
"He can't lead this council.
"All bets are off.
"This isn't Game of Thrones, this is game over."
Despite the talk of lack of Labour support all 30 Labour members present voted for Clr Pandor.
He was bolstered by the vote of Independent, Clr Edgar Holroyd-Doveton.
But the four absent Labour members meant he could not win.
Councillors agreed to meet tomorrow to decide when the next leadership vote can take place.