Labour Party MP Darren Hughes has been stood down from his portfolios as police investigate what is believed to be a sexual complaint against him.
Mr Hughes, 32, went on leave from Parliament on Wednesday after confirming that a complaint has been made against him by an 18-year-old man over an incident in Wellington on 2 March.
The list MP says he has done nothing wrong and is co-operating fully with police.
Labour leader Phil Goff said on Thursday he told Mr Hughes that he has been stood down as senior whip and education spokesperson while the investigation continues.
Mr Goff says after talking to the MP, it is clear that the police investigation is going to take longer than first thought.
He says the situation facing Mr Hughes is unfortunate and has been politically damaging for him.
Sources within the Labour Party have told Radio New Zealand News there have been previous occasions when Mr Hughes' private activities have caused concern and his judgement is now under question.
Labour leader Phil Goff says he was told about the complaint about two weeks ago, but would not be drawn on the nature of the accusation. He says he accepts the MP's word that he has done nothing wrong.
Radio New Zealand's political editor says there is no way Labour could go into an election with one of its senior MPs under such a cloud.
"The complainant was at school last year and Mr Hughes was promoted to be Labour's education spokesman early in February. It's not a good look," he told the Morning Report programme.
"It also undermines his position as senior whip as the MP responsible for keeping other MPs in line."
Goff admits pressuring PM wrong
Mr Goff has admitted he got it wrong when he pressured Prime Minister John Key to reveal details of a police investigation into a former National MP.
Richard Worth quit Parliament in 2009 under a cloud of allegations of a sexual nature.
Mr Worth had been facing a police investigation, but the female complainant withdrew the complaint.
Mr Goff says he has a better understanding now of how these things work and regrets pressuring Mr Key at the time to discuss aspects of the police complaint.