What is going on inside the Herald Sun‘s once-vaunted business section? The news that four senior staffers — Fleur Leyden, Ben Butler, banking guru George Lekakis and veteran editor Malcolm Schmidtke — are all preparing to up-sticks has left News’ default national business desk scrambling to plug a yawning editorial gap.

Insiders say pressure has been building inside the relegated BusinessDaily section for months, before tensions between Schmidtke and unashamedly populist Herald Sun editor Simon Pristel became too big to ignore.

Schmidtke, a veteran newspaper man who has edited or deputy-edited most of the country’s major mastheads, will depart on August 13 with sources saying the move will clear the way for Pristel to again reduce its page count — in line with News’ other tabloids, which only run 2-3 pages of business — or even terminate the section altogether.

“It doesn’t take a genius to see which way the wind’s blowing,” said one source close to the paper.

The final straw, insiders say, was a plan to relocate the business team to level 12 of the Herald and Weekly Times’ Southbank building from its current stronghold on level 10.

The politics of the change have been intriguing because Schmidtke’s hiring five years ago by then editor-in-chief and now Herald and Weekly Times managing director Peter Blunden has meant the section had been regarded as a protected species. While his relationship with Blunden remains strong, Pristel’s affinity for personal finance over hard-headed corporate reportage has resulted in an ongoing struggle for resources and regular page cuts.

Over the last year, the section’s notional eight page allocation has often been slashed to six or even five, leading to despair among Schmidtke’s unfailingly loyal underlings. The BusinessDaily section, often crafted around that day’s Terry McCrann thinkpiece, is today buried well back in the paper with six pages starting on page 57.

The respected Leyden is set to move to former Telstra and News spinner Andrew Butcher’s PR start-up Butcher and Co, Butler will start at The Age in the next few weeks and Lekakis, who has one of the fattest contact books inside the banking world, will join Eureka Report (and not Business Spectator as reported in The Australian).

Schmidtke, who started out on the Herald Sun‘s predecessor The Sun and is a Walkley-award winning former editor of The Sunday Age, deputy editor of The Age and deputy editor of the Australian Financial Review, is unsure where he will head after he finishes up in August, saying only he had been “doing it a long time” as a reason for leaving.

His three former or soon-to-be-former journalists refused to comment when contacted by Crikey about the upheaval, but others were less hesitant.

Insiders say Pristel’s management style has been distant, and that journalists regularly complain he is difficult to deal with. He has upheld the paper’s relentless focus on celebrity and apparently hates politics and business with a passion, a stance which continues to alienate the paper’s state and federal gallery reporters. Ex-political ace Gerard McManus reportedly jumped ship last September for precisely that reason.

The morale in the main newsroom has now hit rock bottom with a small group of young staffers often leaned upon to produce extravagant late night graphics on short notice, leading to countless instances of what one insider called “tears before bedtime”. Sports sub-editors are regularly aggrieved at their editor’s predilection for taking apart the back page of the paper with minutes to spare before deadline.

In one sense Pristel’s approach is not surprising. Giving evidence in the Victorian Supreme Court in the unfair dismissal case of dumped editor Bruce Guthrie, News CEO hopeful Blunden reiterated his belief in breaking news and the “first 15 pages of the paper”, as opposed to the nuanced approach to the paper’s sections pursued by Guthrie. The back page lead should be the second major priority, Blunden said.

One insider said that since his shift from the Sunday Herald Sun to edit the Monday-Saturday edition of the paper in 2008, Pristel had been basically “editing it like a Sunday” with hard news regularly subsumed by garish front-page splashes. The paper’s arts pages have been dumped and political stories are highly unlikely to be milked unless they specifically include the classic pigs at the trough leitmotif.

Nevertheless, the buried business section has still managed a series of impressive scoops, usually owing to Lekakis’ voluminous corporate knowledge. Last year, the paper famously broke the story of the Myer TPG private equity tax scandal and has often been first with corporate appointments and sackings inside banks. However, one well-placed insider questioned whether the Herald Sun actually needed a business section at all, “given its sales were relentlessly driven by its beat-ups”. The purported move to pare-back the section was not surprising, the insider said.

Current deputy business editor Matt Charles is expected to take over the reins after Schmidtke produces his swansong edition. Meanwhile, other News tabloids across the county have been instructed to sound out journalists about making the trek south.