Prime Minister Helen Clark is facing heavy criticism over her decision not to sack Winston Peters as Foreign Affairs Minister, but says there is no immediate basis to do so, following his appearance before Parliament's privileges committee.
The New Zealand First leader has stood down from his ministerial portfolios while the committee is investigating a $100,000 donation from expatriate businessman Owen Glenn towards Mr Peters' legal bills.
Mr Peters told the committee on Wednesday evening he rejects the claim by Mr Glenn that Mr Peters approached him for money.
Mr Glenn, who gave evidence in person to the committee on Tuesday, said he was certain that it was Mr Peters who approached him for money to help pay for an electoral petition in Tauranga.
Miss Clark had said she would await Mr Peters' appearance at the committee before deciding on his future as Foreign Affairs Minister. In a statement on Thursday morning, she said senior colleagues on the privileges committee have advised her that the issues before the committee remain unresolved.
Miss Clark said that, therefore, she had "no further statement to make about this matter today," and that "like all other observers I await further developments."
She said Mr Peters' often belligerent behaviour during this whole affair makes him a difficult person to insist on due process for, but any reasonable person would agree it is fair to do so.
Miss Clark later defended her decision not to make a decision on Mr Peters' future on Thursday.
"Obviously there was a lot of debate around whether Mr Peters would mount any sort of defence which would give people pause for thought last night. The general consensus seemed to be that he raised enough issues for there to be no premature action today."
Miss Clark was criticised by opposition parties on Thursday for not moving to sack Mr Peters as Foreign Affairs Minister.
The National Party said Miss Clark was now clinging on to Mr Peters for her own political purposes. Deputy leader Bill English said Miss Clark has lost her ethical bearings and and there may be a political price to pay for that.
The ACT Party said it was obvious to everyone at the hearing on Wednesday night that Mr Peters had not exonerated himself, and Miss Clark should move to sack him immediately.
Glenn wrong, Peters tells committee
In his second appearance before the committee, Mr Peters said he never discussed money with Mr Glenn during a phone conversation on 14 December 2005.
The New Zealand First leader said Mr Glenn rang him and raised a number of matters, including a suggestion by Mr Glenn that he become a roving ambassador for New Zealand.
Mr Peters also raised doubts about Mr Glenn's memory and accused him of being coached by his lawyer Geoff Harley to give the evidence he gave to the committee on Tuesday.
Mr Harley later said he had no influence on any of Mr Glenn's statements, and that anybody who saw Owen Glenn give evidence would know that he is his own man.
Mr Peters continued to maintain before the committee that he never asked for the money and that he found out about the payment from his lawyer Brian Henry only in July.
The privileges committee will hold another hearing next Tuesday, when Mr Peters' lawyer Brian Henry will appear for a second time. Mr Glenn said the New Zealand First leader personally asked him for a donation, while Mr Peters maintains the request was made via Mr Henry.
Glenn critical of Labour
Mr Glenn appeared before the committee on Tuesday armed with telephone records, emails and an affidavit he says prove his version of events.
The Monaco-based businessman says he feels abandoned by the Labour Party, to which he has been a generous supporter over the years.
Mr Glenn, Labour's biggest single donor at the 2005 election, said he felt like he was under attack from some politicians in New Zealand. He reiterated that he would never have given money to New Zealand First without the approval of Labour Party president Mike Williams.
At a media conference in Auckland on Wednesday, he said Labour had "set the dogs on him" and labelled Mr Williams a liar.
Mr Glenn said Miss Clark must have known about the donation from the outset and suggested Mr Williams does not take a breath unless Miss Clark tells him to. He said Mr Williams not only approached him recently for more money for Labour, but also asked him for a job.
However, Mr Williams denied making any approach for a job, saying Mr Glenn might have been recalling a conversation several years ago during which the businessman expressed interest in setting up a company in New Zealand and discussed the possibility of Mr Williams' involvement.
Mr Williams said he declined that offer, and also said he was sad that Mr Glenn had called him a liar. He told Morning Report on Thursday he was "knocked sideways" by an accusation made by Mr Glenn via the media, that he bribed voters to turn out on election day. Mr Williams says that is nonsense, and it has made him think twice about Mr Glenn's credibility.
Peters thanked businessman - trainer
Matamata racehorse trainer Paul Moroney says there is no doubt in his mind that Mr Peters thanked Mr Glenn for a donation at a lunch in 2006.
Mr Peters has tabled a signed statement in Parliament from another person present at the Karaka lunch, Donald McIlraith, who says Mr Peters and Mr Glenn did not sit together.
He says after lunch he saw Mr Peters speaking with Mr Glenn, but he did not see Mr Moroney with them.
But Mr Moroney told Checkpoint on Thursday there were only three or four people present when Mr Glenn raised the matter with Mr Peters. He says Mr Glenn asked Mr Peters: "Did you get the money" and Mr Peters thanked him for it.