David Parker has now quit from all his Cabinet posts following his shock resignation as Attorney-General last night.
Mr Parker resigned yesterday as the Government's chief legal officer after disclosures that he filed false returns to the Companies Office.
And this morning it was announced that he was going from his other portfolios -- transport and energy.
Prime Minister Helen Clark said Mr Parker came to her this morning after talking with "a range of senior colleagues" and offered his resignation from Cabinet.
Asked whether she would have asked for his resignation if he had not offered it, Helen Clark said: "It probably would have come to that but it didn't need to. He's an honourable person and that's the step he's taken."
She said Mr Parker resigned as Attorney-General because he considered it carried "the very highest of standards".
It appears the possibility of legal action from the Companies Office, and the certain prospect of fierce opposition attacks in Parliament, prompted senior ministers to tell Mr Parker it was time to go.
Earlier today, he said he was "ashamed" about his mistake but that he would "tough it out" and had no intention of giving up his other portfolios.
"I do believe I've got something to offer in those portfolios," Mr Parker said on National Radio earlier this morning.
Mr Parker is expected to make a statement to Parliament this afternoon.
National and ACT had been expected to call on Helen Clark to sack him from all his cabinet responsibilities when Parliament sat this afternoon.
Opposition MPs were set to use question time today to attack Mr Parker over his involvement in a company called Queens Park Mews Ltd in the 1990s.
Investigate magazine alleged Mr Parker made false statements to the Companies Office about the company in which he was in partnership with his father Francis and Dunedin property developer Russell Hyslop.
National Party deputy leader Gerry Brownlee had questioned why Mr Parker was retaining his other portfolios.
"Transport and energy don't need corners to be cut, they need strong, reliable leadership," he said.
Mr Brownlee said Mr Parker's mistake was serious as highlighted by the penalties -- filing a false return could mean a five-year jail sentence and/or a $200,000 fine. A lesser offence that could cover this situation could result in a $10,000 fine and no other penalty.
The Companies Office said it was reviewing all the relevant insolvency files and Companies Office files. Once that was done, it would take legal advice before making any decisions.
Spokesman Adam Feeley said the review of the files would be done as "quickly as possible" and that it was not a case of "weeks or months".
Prosecutions were "relatively rare and prosecution for filing matters are also relatively rare and probably still rarer".
"Mr Parker has admitted multiple breaches of the law, one as recently as September 2005," Mr Brownlee said.
"While he may wish to describe it as a mistake, falsification of documents is very clearly a serious matter."
National would "watch with interest" what action the Companies Office took.
ACT leader Rodney Hide said: "He didn't comply with the law, and you shouldn't be in the Cabinet if you can't comply with the law.
"Why are we saying it is OK not to comply with the law and be a Minister of the Crown?''
Helen Clark earlier said she accepted Mr Parker's resignation from the Attorney-General post but didn't think the "mistake" serious.
Mr Parker said he was considering taking legal action over other allegations made in the Investigate article.
* Helen Clark yesterday passed the Attorney-General role to Deputy Prime Minister Michael Cullen.
Today she gave transport and responsibility for climate change policy to Health Minister Pete Hodgson, and energy to Economic Development Minister Trevor Mallard, both on an acting basis.
- NEWSTALK ZB, NZPA