National says revelations that emails including allegations of mismanagement were copied to Housing New Zealand Corporation (HNZC) chief executive Helen Fulcher show she should step down immediately.
National Party housing spokesman Phil Heatley said the details of the emails published in the Herald on Sunday yesterday made her position untenable.
"The only honourable thing to do as more and more evidence comes to light is for her to stand down just as one of her staff members has," Mr Heatley said.
HNZC is being investigated by Auditor-General Kevin Brady over a confidentiality agreement it had with the contractor who wrote the emails.
The man was told in December last year that $3000 owed to him would not be paid unless he agreed not to take his complaints about accounting irregularities to the media, ministers or MPs.
His claims centre around a $2.1 million "suspense account" used to make it appear a project was completed on time and on budget.
A senior manager, Gerard Coles, who signed off the settlement letter, stood down but board chairman Pat Snedden expressed confidence in Ms Fulcher and she remained in the job.
Yesterday the Herald on Sunday reported that emails alleging financial mismanagement were copied to Ms Fulcher as early as last September and that she was kept in the loop on the gagging letter.
One email dated November 18 to the whistle-blower said: "Helen Fulcher is reviewing the letter you and I have agreed. I met with her yesterday and discussed key points with her and don't expect any difficulty in getting the green light to just get on with it. The payment in lieu issue and apology will be considered as part of my review. Regards Gerard."
Mr Brady's inquiry, which he aimed to complete by May 19, would consider the whistle-blower's allegations and the confidentiality agreement.
The inquiry terms of reference said Mr Brady would "in particular" find out whether Ms Fulcher authorised the confidentiality agreement, or knew about it in advance.
Mr Heatley said Ms Fulcher should have stood down earlier.
- NZPA
