In this paper, we comprehensively analyze counter-propagating cladding mode assisted phase-shifted fiber Bragg gratings (FBGs) and propose an ultra-narrow bandwidth laser line filter based on such gratings. Full vector modal analysis has been used to obtain the mode guiding and its coupling characteristics. We show that the transmission spectrum of the counter-propagating cladding mode assisted FBGs can be tailored by incorporating single or multiple phase shifts along the grating length. Phase shifts open up narrowband transmission windows inside the stop band of the Bragg grating, and the transmitted wavelength can be altered by controlling the amount of phase shift. Unlike conventional FBGs, the grating discussed here has access to the evanescent field of the excited counter-propagating cladding mode, which opens up the possibility of refractive index based tuning of resonance wavelength. Further, the bandwidth of the proposed grating is two orders of magnitude smaller than that of the conventional LPGs. As an alternative application, we also show that with the right length ratio, the multiple phase shifts can also be used to create a very flattened single transmission peak inside the stop band. The effects of grating regulating factors such as the grating length, grating strength, location of the phase shift, and index apodization on the linewidth of the narrow central peak of π PS-FBG are also investigated. We present a clear physical explanation of various factors involved in the counter-propagating cladding mode coupling in such phase-shifted Bragg grating. Due to its extremely narrow transmission window, our study can find application in developing sensors for measuring parameters with greater accuracy. Such phase-shifted Bragg gratings can also be used to create an all-fiber demultiplexer for multichannel systems and fiber optic sensors as a particular application.