National leader John Key is calling on Prime Minister Helen Clark to find out whether Foreign Minister Winston Peters told the truth when he denied his party had received a donation from billionaire Owen Glenn.
Mr Peters' denial has been contradicted by an email from Mr Glenn in which he says he did give money to New Zealand First.
Mr Key said Helen Clark might be reluctant to get involved, but she "cannot afford the luxury" of ducking the issue.
As Foreign Minister, Mr Peters was a member of her Executive and she had to be able to have confidence in the information and assurances she received from him.
"These are serious allegations and they need to be resolved. The New Zealand public is entitled to answers to the questions."
Mr Peters, speaking at Auckland Airport this morning before leaving for Fiji, said: "Here's the deal, the editor of the New Zealand Herald and the Herald journalist Audrey Young can see New Zealand First's accounts and talk to our independent auditors but when they find nothing, then to apologise to the public and then resign.
"We have to have some accountability now. It's a case of put up or shut up."
Asked whether he had seen the emails, he said he had not and had never received money from Owen Glen through trusts or otherwise.
"No means no," he said.
Tim Murphy, editor of the Herald, said today: "The Herald stands by its Weekend Herald story and political editor Audrey Young.
"The issue here is simple: Owen Glenn says he donated to New Zealand First. Winston Peters has said and continues to say that Glenn didn't. The story, based on explicit emails, highlights that gap.
"The responses by Mr Peters, while strident, do not explain that gap and continue to leave open to interpretation all kinds of possibilities for funding assistance for his party and its interests.
"In the circumstances, we see no value in the offer of examining New Zealand First's 'annual accounts'."
Doubt has been cast on Mr Peters' denials by a leaked email exchange between Mr Glenn, an expatriate who lives in Monaco, and his public relations adviser in New Zealand, Steve Fisher.
In an email on February 21 about how to handle media interest in political donations, Mr Glenn says, "Are you saying I should deny giving a donation to NZ First?? When I did??"
Mr Fisher advised Mr Glenn to continue referring questions about donations to New Zealand First, which is what he did.
But Mr Peters maintained at the time that his party received no donation and held a press conference in February to deny it.
He has continued to maintain that position.
The controversy has flared during an important month for Mr Peters, both as New Zealand First leader and as Foreign Minister.
He will play a prominent role in hosting US Secretary of State Condoleezza Rice's visit to New Zealand in two weeks, possibly the highlight of his term as Foreign Minister.
Neither he nor Helen Clark will want domestic issues to overshadow it.
Mr Peters was leaving for Fiji today on a Pacific Foreign Ministers delegation to discuss a return to democracy with coup leader Frank Bainimarama.
Tongan Prime Minister Fred Sevele will lead the delegation, which will also include Australian Foreign Minister Stephen Smith and the Foreign Ministers of Papua New Guinea, Samoa and Tuvalu.
New Zealand First's annual convention is to be held in Auckland this coming weekend, before the general election, which could be as little as three months away.
Helen Clark has previously refused to comment on the donation controversy, and today continued to insist it is an internal matter for New Zealand First.
She said today it was a party matter and did not relate to Mr Peters' foreign affairs portfolio, in which he conducted himself with integrity.
"I am not a private police force," she said on Newstalk ZB.
"I have made this point on many occasions when issues have come up around public figures."
She relies on the support of Mr Peters' party to keep her minority Government in power.
Mr Key was cautious in his language last night about Mr Peters, who could hold the balance of power after the election.
He made no assumptions about the veracity of what Mr Peters said.
"We are not saying Mr Peters is misleading the public, but the emails seem to contradict what he is saying," Mr Key said.
"He has a responsibility to clear that up."
Asked what should happen if it were not cleared up, Mr Key said: "Ultimately the public will be the judge of that."
Parliament is in recess this week, and resumes next Tuesday.
- with NZPA, NZ HERALD STAFF