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Stott Despoja was elected leader on 6 April 2001, replacing Meg Lees, who resigned from the party in July 2002.

Further public criticism and disputes between Democrat senators resulted in Stott Despoja's resignation as leader on 21 August 2002, following presentation by four of her six colleagues ( those who had earlier enabled the passage of the GST ) with a ten-point ' reform ' agenda proposed by John Cherry.

She announced her resignation in a speech to the Senate, concluding with a " pledge to bring the party back home to the members again ", and referring to her reluctance over colleagues ' attitude towards her.