Prime Minister John Key says the voters of Epsom will decide if they believe Act leader John Banks at the ballot box next election.
His comments come after mounting pressure from Opposition MPs to sack Mr Banks from his ministerial portfolios.
They claim Mr Banks went out of his way to make sure donations appeared anonymous despite knowing where they came from in his failed 2010 mayoral election.
Mr Key said this morning on TVNZ's Breakfast he had no reason not to believe Mr Banks.
"There are no police charges, so what basis would I lose confidence in him," he said on Breakfast.
"Can I rely on his word - he's got a version of events; others have got a different version. It's not for me to forensically go through that," Mr Key told Breakfast.
Mr Key said ultimately if Mr Bank's constituents didn't believe him they wouldn't vote for him.
"All politics is local - so it's for individuals who vote to decide whether they want someone to represent them. If they don't feel they can trust him, they won't vote for him," said Mr Key on Breakfast.
He would not say if he would support Mr Banks standing again in Epsom.
"That's a matter for him - he is a different political party."
Police looked at whether Mr Banks had negotiated donations of $15,000 from SkyCity, and $50,000 from Kim Dotcom; later listed as anonymous.
They found there was not enough evidence to charge Mr Banks.
Sworn statements released last week under the Official Information Act from Kim Dotcom, his bodyguard and lawyer questioned if Mr Banks had been honest with the Prime Minister and the public over the donations.
Mr Key said he would not raise the issue with Mr Banks again.