John Tamihere should consider finding a new job, Prime Minister Helen Clark suggested this morning.
After more inflammatory comments by the MP about Jews, women and colleagues were revealed yesterday, Miss Clark placed Mr Tamihere on extended leave due to his suffering "considerable stress".
Mr Tamihere was due to apologise for comments about colleagues made to Investigate magazine tomorrow at caucus but will now not be given the opportunity.
He has made no formal resignation offer but should think about his future Miss Clark said.
"I think in the period of extended leave that John now has he needs to carefully consider his options," she told National Radio.
"It's clearly a very long route back to redemption and rebuilding a career and the other options are, I suppose, to find another one, he's going to have to reflect on that."
She made it clear he would not be back in the fold after the election.
"I can't see that a re-election to the Cabinet would be possible because the extent of destruction of confidence is pretty deep.
As I say it would be a very long route to redemption."
The length of leave was undetermined.
"It's clear that people don't think clearly if they are giving interviews like this. The comments that have come out are simply unacceptable," she said.
"A threshold has been crossed. There were comments published last week that were utterly unfair and really quite revolting about quite a range of colleagues but people have got broad shoulders, we can shake that off. It's another to cross that threshold with the Holocaust comments."
She continued to back Mr Tamihere's claim that he did not know the interview was on the record.
"I don't think anyone in their right mind would agree to do an on-the-record interview with a tape recorder rolling of this nature," she said.
"I do think there has been an element of duplicity but that doesn't change the fact that things were said which are utterly unacceptable and offensive I would think to most New Zealanders."
Sunday newspapers yesterday printed comments by Mr Tamihere saying that while he was revolted by the Holocaust, he was sick of hearing about Jews being gassed and killed in order to make him feel guilty.
Miss Clark tried to placate the Jewish community: "My message is that the Holocaust is genocide, it was one of the most repugnant and ferocious events of human history and I am very concerned at the pain caused to them and to others that suffered in the Holocaust by thoughtless comments."
New Zealand Jewish Council President David Zwartz said today Mr Tamihere's comments were upsetting because they implied the Jewish community used the Holocaust as a way of making other people feel guilty.
"Which is not the case," he told NZPA.
"The Holocaust is a matter of historical fact that we think needs to be understood so that sort of thing doesn't happen again."
It was important to stop discrimination against minority groups and oppression because it could gradually lead to genocide, as it did in Nazi Germany, Mr Zwartz said.
Mr Tamihere had trivialised the Holocaust by treating it as "merely a matter of irritation".
Mr Zwartz said he had been contacted by "quite a few" members of the Jewish community who had been upset by Mr Tamihere's comments.
In the latest comments Mr Tamihere also said his fellow Labour MP Clayton Cosgrove was not being promoted because he had conducted a "nasty telephone campaign" against Prime Minister Helen Clark and her husband Peter Davis before she took over as Labour leader.
He also made derogatory comments about women: "I don't mind front-bums being promoted, but just because they're (women) shouldn't be the issue, they've won that war," Mr Tamihere reportedly said.
Miss Clark said Mr Tamihere has passed the point where "a mere apology" would do.
On TV One's Breakfast show Miss Clark said Mr Tamihere had apparently destroyed his colleagues' confidence in him. She said she had not asked for his resignation but declined to say if she would accept it if offered.
"I'm giving him some space to think some of these issues through."
Yesterday Mr Cosgrove said the suggestions he ran a "nasty" campaign against Miss Clark were "pure fantasy". He would not comment on whether Mr Tamihere retained his support.
Party leaders are said to be no longer concerned about the possibility of Mr Tamihere resigning from Labour, or as an MP, and are confident they can maintain a majority in Parliament with or without him.
Labour insiders also do not believe that Mr Tamihere would try to force a by-election or run against Labour as an independent at a general election.
However should Mr Tamihere resign Miss Clark said -- because an election has to be held within six months -- a by-election was unlikely.
Mr Tamihere resigned from Cabinet last year as several inquiries were undertaken into his time as chief executive of south Auckland's Waipareira Trust. He was cleared of any wrong-doing, but was not immediately returned to Cabinet.
Miss Clark said the term 'front bums' to describe women was crude, "and really the sort of language that you would not (not) expect from a high profile politician," she told Newstalk ZB radio.
Miss Clark said it appeared that the second raft of inappropriate comments was released by Investigate journalist Ian Wishart because Mr Tamihere had questioned staff about whether they had seen a tape recorder on the table during the interview. It was possible the comments would have been allowed to rest had Mr Tamihere not done so.
"That may well be so, although Mr Wishart probably isn't the sort of person to let it rest," Miss Clark said.
"Clearly there is a difference of opinion between him and Mr Tamihere about how the interview was set up. So probably he was bound to release other material at some point if he had it."