KEY POINTS:
Winston Peters last night admitted he received a donation from billionaire expatriate Owen Glenn - after repeatedly denying the story for a week.
The New Zealand First leader said he found out about the $100,000 donation only at 5pm yesterday when his lawyer, Brian Henry, told him.
The money was used to help pay the legal bills that followed an election petition Mr Peters launched after the 2005 election.
Since last Saturday, when the Weekend Herald published an email in which the Mr Glenn said he had given money to NZ First, Mr Peters has angrily denied the allegation.
He called for the resignation of Herald editor Tim Murphy and political editor Audrey Young.
"Here's the deal," Mr Peters said. "The editor of the New Zealand Herald and the Herald journalist Audrey Young can see NZ First's accounts and talk to our independent auditors, but when they find nothing I want them to apologise to the public and resign. We have to have some accountability right now. It's a case of put up or shut up."
The story was a "scandalous piece of journalism, indolence and sloth".
Last night, Mr Peters said Mr Henry had "broken policy" to tell him the source of contributions to his legal fees.
"Until today I've been unaware of the source of all donations for legal expenses and I have cause to be very grateful to Mr Glenn for his very generous contribution."
Mr Peters said that since 1991 he had been involved in 14 legal actions, partly funded through donations, and Mr Henry had "a firm policy" of not disclosing the source of donations.
"Mr Henry decided, due to publicity over the past weekend in respect to Mr Glenn, that he should break this policy and inform me that Mr Glenn had donated in 2006 a sum in the order of $100,000 towards the legal costs of the Tauranga electoral petition."
Mr Glenn did not make the donation to NZ First, he said.
This week, Mr Peters gave Helen Clark an assurance the magnate had not donated any money to the party.
Last night, he said: "I told the Prime Minister what I then knew, and today I have told her what I have learnt."
The row over the donation broke out in February, after Mr Glenn said he had given money to parties other than Labour. There was intense speculation NZ First was one of them.
The Foreign Minister produced a large "NO" sign at a press conference soon after questions of a donation to his party arose. The issue was reignited when the Herald published the email from Mr Glenn to his spokesman in New Zealand, Steve Fisher.
It said: "Steve - are you saying I should deny giving a donation to NZ First?? When I did??"
In reply, Mr Fisher told Mr Glenn not to contradict Mr Peters.
Last night, Mr Henry said: "It wasn't until the media started going crazy during this week, and in particular saying Mr Glenn sent the email, that I decided it was time to tell him [Mr Peters]."
