Mr Little: "My concern is that if the Prime Minister was aware of information that meant that Mike Sabin - being the chair of the law and order select committee - was compromised, then he should have acted as soon as it was apparent that there was that conflict of interest."
But Prime Minister John Key said Mr Little was mistaken and that Mr Little's chief of staff, Matt McCarten, had contacted his chief of staff, Wayne Eagleson, about it on December 3 - although Mr Eagleson knew already.
Mr Key said he himself had found out on December 1.
"We've never denied that my chief of staff knew in late November. I was told in very early December."
All dates were well after the September 20 election in which Mr Sabin was returned as MP for Northland and after Mr Sabin had been appointed chairman of the law and order select committee on October 22.
Mr Key said it would have been "useful" if Mr Sabin had told the party about the personal matter earlier "but he didn't and we didn't know about it."
Mr Sabin resigned as an MP last Friday "due to personal issues that were best dealt with outside Parliament".
A by-election will be held on March 28.
When asked if he was one who first alerted the Prime Minister's office about the allegations, Mr Little said this morning: "I'd be very surprised if I was the one. It was clear to me that the allegations had been swirling around for a while."
When asked what Mr Key's motivation would be for saying he did not find out until December, he said it was possible Mr Key was trying to diminish his level of knowledge.
He said the Prime Minister's office acknowledged receiving his note but that was the last he heard about the matter.
Mr Key's office said last night that Mr Eagleson was made aware of the issue in late November and told Mr Key the next week. They were unable to clarify whether Mr Sabin had told Mr Eagleson directly.
Mr Key said yesterday he may have stood Mr Sabin down in early December if he had been a minister but at that point did not believe it was necessary for Mr Sabin to be removed as a select committee chair.
"The reason I didn't was because I thought on balance, given the information I had at that time, the course of action I took which was to let things ride and see how they progressed was about the right course of action. If he was a minister I probably would have taken the step of standing someone down, but as a select committee chair, I don't think so."
Mr Key said the National Party President, Peter Goodfellow, was also unaware of Mr Sabin's issue prior to the election. He did not know whether any Government ministers had known earlier under the "no surprises" policy the Government operates.
Mr Goodfellow told reporters this morning he was told about it about "a month before Christmas" but he did not want to divulge who told him.
Rodney MP Mark Mitchell said he was in daily contact with Mr Sabin and would continue to support him as a friend.
