KEY POINTS:
New Zealand First has paid $158,000 to Starship hospital - the amount Auditor General Kevin Brady found it spent unlawfully in the 2005 election.
Leader Winston Peters made the announcement in Parliament yesterday, saying that while the party had done nothing wrong, it accepted it had lost the argument in the court of public opinion.
But he immediately drew taunts of "pay it back" from the National benches.
United Future is now the only party with an outstanding debt and president Denise Krum said the party was still committed to repaying it.
Mr Peters released a letter he sent to Mr Brady saying the party had always been scrupulous about getting Parliamentary Services and the Chief Electoral Office's approval before spending funds.
"The party's own legal opinion cast doubt over whether your report could be legally sustained.
"However, New Zealand First accepts that in the court of public opinion we cannot win an argument with the Auditor-General, whatever the merits of the case, so we have decided to return to New Zealand taxpayers the amount in dispute."
It would be used for research. Act leader Rodney Hide said paying Starship was "totally unprincipled".
"The debt is to the taxpayer."
The Auditor-General had made it plain to Act that the appropriate response was to pay the money back to the Parliamentary Service.
"This is equivalent to a citizen owing money to the tax department, refusing to pay it for two years, promising to take the tax department to court, deciding not to, giving the money to their favourite charity like their children's school or hospital and saying that makes up quits. It doesn't eliminate the debt at all."
