When offering a $20,000 personal loan to his then press secretary - a woman he had strong feelings for - former Conservative Party leader Colin Craig did not consider whether it created an inappropriate power balance, he admitted to a court.

Rachel MacGregor worked closely with Craig from about the time he founded the Conservative Party in 2011 until she resigned suddenly two days before the 2014 election.

Whale Oil blogger Cameron Slater subsequently, in posts in 2015, claimed Craig sexually harassed her.

Craig is suing Slater for defamation over his blog posts, while Slater is counter-suing Mr Craig over allegations the former politician made in a 12-page pamphlet he sent to 1.6 million homes trying to defend himself.

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On Monday in the High Court at Auckland, Justice Kit Toogood asked Craig whether he thought MacGregor was likely to feel trapped because he had not only loaned her money but also previously kissed her.

Craig said that with hindsight he accepted this had tilted the balance of power in his relationship with Ms MacGregor in his favour.

But he did not think about this at the time because it was MacGregor who had asked for help after struggling to pay off her credit card debts, he said.

He said he and his wife Helen considered MacGregor a friend and wished to support her and had made similar loans to other friends and family.

He also encouraged MacGregor to seek independent financial advice and repeatedly told her she was free at anytime to seek an alternative loan or repayment option.

In a series of questions, Justice Toogood also quizzed Craig about whether he and MacGregor had wanted to have a physical relationship.

He replied that because he was married, they could not. However, if they had been both free to do so, he thought they would have entered a relationship together.

-AAP