Taito Phillip Field will stay in Parliament and fight allegations against him.
His stand, announced yesterday, rebuffs Prime Minister Helen Clark's invitation on Monday for him to resign. But he says she supports his decision.
He has backed down on his vow to seek re-selection for Labour in Mangere, saying the process would not begin until late next year and "I'll cross that bridge when I come to it".
Mr Field issued a carefully worded statement yesterday denying allegations against him and telling any person with evidence of wrongdoing to take it to the authorities.
"The New Zealand public deserve to know the truth," he says in it.
National deputy leader Gerry Brownlee said Helen Clark had been "rolled" and humiliated by Mr Field.
"That is the end of the Labour Government. That is the chink in the armour which will see it all unpeel and then go out the back door."
Asked on Monday whether Mr Field should resign as an MP, Helen Clark said: "I'm sure in light of any humiliation like this, anyone would consider what their career prospects might be."
Mr Field said yesterday: "The message I got from the Prime Minister is quite clear and that is that she supports me to continue to be an MP ..."
Helen Clark said yesterday: "What I've always said is that anyone in this position will be considering their position. Right now his position is that he is going to fight the allegations."
She said Mr Field was not committing to seeking re-selection because he was "in the middle of fighting a lot of allegations which he absolutely rejects."
Mr Field said he had been subjected to "trial by media".
Asked if he had been unwise, he said: "We all make mistakes, the important thing is learning from those mistakes and being humble enough to accept you need to learn from those mistakes."
He then said he could hold his head up in the community because "I believe I've done nothing wrong".
The MP believes the Ingram report into allegations made against him drew wrong conclusions or made wrong observations in some instances.
Labour sources raised this in Mr Field's defence yesterday, but the Government has rejected calls for another inquiry.
Mr Field has not gone public with his criticisms, aware that the report, while damning, makes no finding of illegality or corruption and so gives him some protection.
Public criticism of it would also undermine the Government's use of it and its desire to shut the issue down.
Mr Field is believed to have little support among his fellow Labour MPs.
But those advising him include Labour colleagues Paul Swain, Dover Samuels and Russell Fairbrother.
Mr Brownlee said: "I can't believe their members are going to go back into their electorates ... and look New Zealanders in the eye and say 'Mr Field is not a problem, Mr Field has done nothing wrong, and Mr Field has every right to be in Parliament'."
Mr Field's electorate committee chairman, Tafafuna'i Tasi Lauese, said the local Labour party was behind the MP.
"He has made his decision, and that is what we are going to support him with. We have always been in support of Taito."
He would not commit his support yet if Mr Field sought reselection in Mangere, saying: "That's another thing to come."
Engineering Printing and Manufacturing Union national secretary Andrew Little said Mr Field should resign.
Mr Little said the MP had failed to explain himself in public and it was deeply distressing that a man formerly connected to the union movement should conduct himself in such a way.
He said MPs were in a position of integrity and trust and had to be above suspicion. If the Labour MP chose not to resign over the Ingram report, his future candidacy for the Mangere seat could be blocked in any nomination process.
Field digs in and promises a fight
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