Neesham, who has played 12 tests, 41 one-day internationals and 15 twenty20 matches for his country, has been struggling with both the ball and bat since the all-rounder returned from a back injury earlier this season.
The 27-year-old has not played any international cricket since June and in November was overlooked for a spot in the Black Caps.
He was given a clear message to go back to domestic cricket and dominate. But the hard-hitting left-hand batsman and right-arm medium-pacer has been off his game.
He has scored just 18 runs in three innings in the Super Smash and he has been batting up the order, so he has had plenty of opportunity.
With the ball he has picked up five wickets but it is the amount in the other column which is the problem.
He has been far too expensive, conceding 11.27 runs an over. He had a particularly disappointing match against Canterbury.
He was cleaned out by Andrew Ellis for 10 and bowled poorly. His first over went for 17 runs and allowed Canterbury to release the shackles after Otago had done a good job of keeping the brakes on the run rate.
''The numbers are there for everyone to see,'' Walter said.
''He has been struggling for form which is something all cricketers go through.
''It is disappointing for him to sit out and it is disappointing when you have a player of his standard and he is going through a lean patch.
''But we have to give guys an opportunity to play knowing we have lost three games already, so if not now then when?
''Sometimes it is the best thing for the player to be left out. If gives them an opportunity to get out of the heat of battle and figure out a way to get back in form.''
Walter is confident Neesham will rediscover his form.
Neesham has been replaced in the 12 by seamer Matt Bacon.
