Prime Minister John Key said he had no option but to accept the word of National MP Aaron Gilmore that he did not threaten to get a waiter sacked.
Mr Gilmore made the denial to Mr Key's chief of staff, Wayne Eagleson, even though a friend of the MP, Christchurch lawyer Andrew Riches, contradicted Mr Gilmore.
Mr Key said if a formal complaint was made and it was clear that Mr Gilmore had misled his office "then that would be a very serious issue".
But he was adamant he would not initiate an inquiry. "I am not the police force," he said in Auckland.
Mr Eagleson told the Herald he had asked Mr Gilmore directly whether he had in any way invoked the office of the Prime Minister in a threatening way to the waiter and he got a direct answer. "He said he didn't."
Mr Key said he was very disappointed in the behaviour of Mr Gilmore, who returned to Parliament in February to fill the vacancy created when Lockwood Smith became High Commissioner to London.
"He has let himself down, he has let the party down. He has apologised and rightfully so."
Mr Riches claimed that Mr Gilmore called the waiter a "dickhead" and threatened to use his influence with Mr Key's office to have the Heritage Hanmer Springs hotel waiter sacked when he refused to serve more wine.
Mr Riches left a note apologising for the behaviour and assuring the waiter his job was safe.
The union representing hospitality workers called for Mr Gilmore to resign over the "degrading" comments. Mr Gilmore issued two apologies on Thursday but had blamed it on the members of his dinner group being "boisterous" which had incensed Mr Riches.
Mr Gilmore, who apologised again yesterday, posted on Facebook that "the offending comments were due to my comments and not to those of any one of my friends".
"I am also sorry that this behaviour has brought shame to me, my family, friends and my work as a MP. The whole episode has been a learning lesson and I wish to move on."
Service and Food Workers Union spokesman Chas Muir said:
"Aaron Gilmore should stop blaming others and apologise to all hospitality workers in New Zealand who he degraded through his arrogant behaviour on Saturday night. He should also step down if the serious allegation of using his position and the Office of the Prime Minister to bully an employee into breaking the law, by serving an intoxicated person, [is confirmed]."
Mr Gilmore, 39, entered Parliament in 2008 on the list. In 2010, Mr Gilmore e was forced to correct his CV after the Herald revealed he had claimed a high-level finance industry qualification which he did not have.
The next person on National's list is Claudette Hauiti, a former Maori broadcaster..
- Additional reporting by APNZ