KEY POINTS:
Prime Minister Helen Clark says she still has confidence in New Zealand First leader Winston Peters, as Foreign Affairs, Racing and Associate Senior Citizens Minister.
Helen Clark met Mr Peters this afternoon so he could explain the controversy surrounding allegations of covert funding to NZ First.
The meeting followed publicity over a $25,000 donation Sir Robert Jones says he made to the party that has never been declared, and other allegedly covert donations to NZ First.
After the meeting had taken place, Mr Peters issued a brief statement saying he met Helen Clark to "clear up the media-generated hysteria" of the past two weeks.
"We had a cordial meeting and I am confident that these matters have been put to rest," he said.
"This whole affair is a shameful episode of dirty politics."
Mr Peters avoided the media by driving the short distance from his office in Bowen House to the Beehive for the meeting, and he returned the same way without commenting to reporters.
Approached by NZPA outside the lifts to his office in Bowen House, a smiling Mr Peters refused to answer questions.
He was accompanied by his lawyer Brian Henry and one media adviser.
Mr Peters this afternoon repeated the statement to a media pack on his way into Parliament.
Word as bond
But Helen Clark stopped to tell reporters she still had confidence in Mr Peters as a minister.
"What I have to be assured with respect to Mr Peters as a minister is that he is acting lawfully and I've got no reason to doubt his assurance on that.
However, she said it was not up to her to question Mr Peters on the Spencer Trust - the trust into which Sir Robert's cheque was banked.
"I've made it clear all the way through this round of allegations that I accept an honourable member's word as his bond unless I have reason to doubt it. I don't have reason to doubt it at this point."
She described the talks as cordial and said she still had confidence in Mr Peters. Mr Peters said media speculation the support agreement between Labour and NZ First was in jeopardy was "nonsense".
Donations over $10,000 are meant to be declared, but NZ First had not made any such declarations for many years.
Sir Robert says Mr Peters solicited money from him - which Mr Peters denies - and that a cheque for $25,000 was made out to the Spencer Trust at the request of Mr Peters' staff.
Mr Peters has refused to say what the trust is or what the money was used for.
On Friday he said he had nothing to do with the trust, which is managed by his brother Wayne Peters, who is refusing to discuss it.
The saga follows Mr Peters admitting his lawyer received $100,000 from Owen Glenn to help pay his legal expenses, after repeatedly denying it, and news that donations from the Vela family had been made in such a way that they did not have to be declared.
Helen Clark said yesterday she did not believe Mr Peters or NZ First had broken electoral law mainly because it was so broad "bulldozers" could be driven through it.
Many of those involved, including Mr Peters, were lawyers, so Helen Clark said she "would be very surprised if there is illegality".
She indicated it was unlikely that anything would come from the meeting that would force an early election.
It has also been reported that Mr Peters had offered to brief National leader John Key on the issue, but Mr Key today said that was not the case.
He said he would only be prepared to take up a briefing, if it was offered, on a "no strings attached" basis.
"I'm not interested in a secret briefing from Winston Peters," he said.
"These are serious allegations. Mr Peters has it within his capacity to give the answers. I think the Prime Minister should be demanding those answers and I don't think that's for a secret little club to know, I think it's something the New Zealand public are entitled to answers on."
- NZ HERALD STAFF, NZPA
