Opposition parties have renewed their calls for Prime Minister John Key to sack Act leader John Banks, claiming a police finding that Mr Banks had filed a false return but it was too late to prosecute him showed he had misled the Prime Minister.
Mr Key faced questions in Parliament about the police investigation into donations Mr Banks received from Kim Dotcom and SkyCity which were listed as anonymous on his return.
The police did not lay charges, saying that although the donations should not have been recorded as anonymous there was not enough proof that Mr Banks had done it knowingly, and the time limit for the lesser offence of filing a false return unwittingly had expired, meaning no prosecution was possible.
Labour's Grant Robertson said that the police finding was enough to raise doubts about Mr Banks' assurances to Mr Key that he had acted in accordance with the law.
He said Dotcom's evidence, as well as that of Dotcom's lawyer, about conversations with Mr Banks also indicated Mr Banks had misled the Prime Minister in May when he said he had not known about the Dotcom donation.
However, Mr Key - who is still refusing to read the police report - said it had not been proven Mr Banks breached the law.
"The test is whether I can rely on [Mr Banks'] word and he has given me an assurance that he met the law. The police have quite clearly said there was insufficient evidence."
Of the Dotcom donation, Mr Key said that under the Local Electoral Act it was legal to solicit donations and still declare that donation as anonymous.
Mr Key also sought to turn the tables on his questioners, saying that many MPs would have also filed returns which would now be illegal but were legal under the old electoral law.
NZ First leader Winston Peters said the police's inability to prosecute because of a time limit did not mean that Mr Banks had complied with the law.
Mr Robertson called on Mr Banks to allow police to release the statement Mr Banks had given.
Mr Banks said police had gone over the evidence intensively and weighed up every word and he was now moving on. "They concluded: no charges."
* The test for Banks to retain the confidence of Key: That he did not mislead Key when he gave an assurance he had fully complied with the Local Electoral Act and that he was not aware that Kim Dotcom had made donations.
* What the police said: "The return was wrong in content as the donations for SkyCity, Dotcom and [third donor] should not have been recorded as anonymous."
* Why there was no prosecution: Police concluded the return was "false" but could not prove Banks had known when he signed it, so could not prosecute for knowingly filing a false return. A lesser offence of unknowingly filing a false return could not be prosecuted as a six-month time limit had lapsed.