Labour leader Phil Goff says he supports his MP Darren Hughes who is being investigated by police.
Mr Hughes, the party's senior whip and education spokesperson, confirmed on Wednesday that he is the MP at the centre of a police investigation into allegations involving an 18-year-old man.
Police confirmed they are investigating a complaint relating to an incident alleged to have occurred in a Wellington suburb early on 2 March.
However, they will make no further comment until a decision has been to made over whether to lay charges or disregard the complaint. Police are not seeking any help from the public at this stage.
Radio New Zealand's political staff understand the complaint is of a sexual nature.
In a statement on Wednesday, Mr Hughes said he had done nothing wrong and was fully co-operating with police. The MP said he made his name public because he does not want other Labour MPs tarnished by the allegations.
Labour leader Phil Goff says he found about the complaint a few weeks ago and is taking Mr Hughes at his word that he has done nothing wrong.
Mr Goff says Mr Hughes will be on leave until the complaint has been resolved and will retain his position as senior whip and education spokesman for now.
"The leave will be given in an expectation that I hope that a police decision will be made within a relatively short period of time. If it's not, then I'll have to re-examine his position in that light."
Mr Hughes boards with Labour's deputy leader, Annette King, in Wellington. Mr Goff would not respond to questions about whether search warrants have been issued for the residences of any Labour MPs.
Mr Goff says he was told by journalists that information about the complaint was leaked to the media by the Beehive.
Prime Minister John Key said there had been some talk about Mr Hughes at the start of the week, but does not believe staffers from his office alerted the media.