KEY POINTS:
National leader John Key has called on New Zealand First leader Winston Peters to apologise for misleading the public over the $100,000 donation from Owen Glenn.
Mr Key commented on the issue for the first time today after Mr Peters' admission on Friday that Mr Glenn had paid the money towards his legal expenses.
Mr Peters said he had not known about the donation before that, but says he still does not have to declare it as he did not benefit.
Mr Key said Mr Peters should apologise for misleading the public.
"He should admit he either wittingly or unwittingly misled the New Zealand public."
Prime Minister Helen Clark said today the revelation was embarrassing for her foreign minister.
Both she and Mr Peters said National MP Nick Smith had also benefited from donations toward his legal battles and no one knew where he got this from.
Mr Key said in contrast his MP had declared the interest.
"Dr Smith has correctly followed the procedure and declared the Freedom of Speech Trust in his pecuniary interest register as he should do, because the donations to that trust are helping him to meet his legal obligations," Mr Key said.
"They were of benefit to him, because if they hadn't been made, he would have to pay the liability himself."
Mr Key said there was no question that Mr Peter has benefited from the donations from Mr Glenn.
"If Owen Glenn had not made those donations to Winston Peters' legal fund then Mr Peters would have been forced to meet that liability. Clearly there is a benefit."
Mr Key said Miss Clark had failed to hold Mr Peters to the standard required of a minister.
"She hasn't wanted to prosecute the issue, because if she had done so it may have left her in a difficult position when it comes to the arrangements of her Government, and this is not a prime minister who currently wants to face an election."
Some have accused National also of being soft on Mr Peters, but Mr Key said he did not agree with this.
"We had no option but to accept Mr Peters' word, even when it is completely contradicted by the email evidence.
"Now that he has made it clear he did receive a donation it is important he takes it to the next step and admits he gained from it."
ACT leader Rodney Hide has said he will complain to Speaker Margaret Wilson over the donation, for failing to declare it under Parliament's rules.
But Mr Peters said yesterday he had legal advice there was no need for him to declare the donation or others to his legal action fund under electoral law or parliamentary and ministerial rules.
Mr Peters yesterday told NZPA there was a "huge difference" between a legal action fund and other political funds.
He argued that neither he nor New Zealand First benefited from the legal actions or the funds put it into it. Also, it was not a campaign issue, but rather a straight legal cost.
The legal fund was set up in 1991 when Mr Peters became involved in a series of legal actions. The most notable of these were relating to the winebox scams.
Mr Peters said he did not gain financially from those cases and the shortfall had cost him "plenty".
Mr Glenn's money has been directly linked to Mr Peters' attempt to overturn National MP Bob Clarkson's election night victory in Tauranga in 2005.
Asked if this action was taken to benefit both Mr Peters and his party, he said it was not the point of the case, which aimed to test the law.
- NZPA
