KEY POINTS:
John Key yesterday laid out his case to become National's leader as Labour threatened to go to the police over the party's ties with the Exclusive Brethren.
Among developments in a fast-moving day on the political front:
* Deputy Prime Minister Michael Cullen accused National of lying about its links with the Brethren and said Labour was considering laying a police complaint;
* Threats by Labour to refer allegations National had dipped into its leader's fund for electioneering to the Auditor-General for investigation;
* The only public comment yet by Don Brash since his decision to step down as leader - saying he expects to become National's scapegoat.
Barring a dramatic last-minute turn of events, Key, the party's finance spokesman, will become National's new leader at tomorrow's caucus meeting in Wellington.
But just who will become Key's deputy is less clear-cut. Former leader Bill English and current deputy Gerry Brownlee are contenders for the job, although Judith Collins and Simon Power are also in the running. Katherine Rich's name had been raised, but yesterday she ruled herself out.
While Brownlee is considered the less volatile frontrunner for the position, there are factions within National's caucus who believe the party would be better served long-term by a Key-English partnership.
If English was to give Key a free run at the leadership it could be in return for the deputy's job and the attractive finance portfolio. Such an arrangement would present a united National front, and avoid the sort of public bloodletting which has dogged the party in recent years.
English said yesterday talks were moving in a positive direction but stressed he could work under Key. Key told the Herald on Sunday yesterday if he became leader tomorrow he would be happy to work with whoever caucus appointed as deputy, but would not state his preference: "There are a number of people who could fill that role with great aplomb and I will be working very closely with whoever the caucus decides should be the deputy."
Key outlined his case for the leadership and his vision for National leading into the next election. "I think I represent a modern, dynamic New Zealand, a very positive attitude of what New Zealand can become. I think that New Zealand is crying out for that sort of leadership."
Key, while refusing to speculate on whether he had the numbers ahead of tomorrow's special caucus meeting, said a great deal of consideration had gone into his decision to stand.
However, he had given no thought to where Brash might fit into a Key-led National. He was also comfortable, he said, if his colleagues decided to opt for English as leader.
The fall-out over National's links to the Brethren is likely to continue, with Cullen claiming National's campaign manager Stephen Joyce could be charged with making a false statutory declaration, by stating that National knew nothing of the campaign.
He said Labour might refer allegations that National had dipped into its leader's fund for electioneering to the Auditor-General for investigation.
National also appeared exposed with revelations alleging Brash used his leader's fund to pay for a postcard mailout by the horseracing lobby to pundits, urging them to vote National.
Auditor-General Kevin Brady said last night he would not be looking into the postcard claims as legislation validating "everything like that" had already been passed by Government after it was questioned over the pledge card.
