Labour Party leader Andrew Little has been threatened with legal action over comments he made about the owners of a hotel chain.
In a statement, the founder of Scenic Hotel Group, Earl Hagaman said Mr Little had just over a week to retract and apologise for linking together the award of a contract through a contestable process and an earlier unsolicited donation to the National Party.
After seeking legal advice, Mr Hagaman's lawyer has notified Mr Little today that defamation proceedings will ensue unless the position can be properly retrieved.
Mr Little has confirmed he has received the letter and is considering the issue and taking advice.
"In the end I have a moral duty, as leader of the opposition, to call the government to account, and I will never, never resile from doing that."
Mr Little last month asked the Auditor-General to investigate the awarding of a management contract for the Matavai Resort in Niue. Mr Hagaman and his wife, who won the government contract, earlier said they would support any inquiry into what they said was a contestable process.