National MP Bob Clarkson has kept his Tauranga seat after three High Court judges found he did not overspend on his election campaign.

New Zealand First leader Winston Peters, who Mr Clarkson ousted from the seat in the September 17 election, had lodged an electoral petition alleging he breached electoral law by knowingly spending more than $20,000 during the campaign.

Chief High Court Judge Tony Randerson, with Justices Lowell Goddard and Graham Panckhurst, heard the petition in the High Court at Tauranga late last month and Parliament's Speaker, Margaret Wilson, today delivered their findings.

Ms Wilson said the judges found Mr Clarkson's election "was not void".

The announcement was greeted with cheering and clapping from the National benches in Parliament, and MPs rushed to congratulate a clearly elated Mr Clarkson.

Only two NZ First MPs were in the chamber for the ruling -- Doug Woolerton and Peter Brown. They showed no emotion but Mr Peters later issued a defiant statement calling for changes to the law.

National Leader Don Brash immediately congratulated Mr Clarkson.

"We were always confident that he was, in fact, complying with the rules applying to the election of Members of Parliament," Dr Brash said.

"I think his confirmation is something which we should certainly applaud in this House and wish him all the very best."

Neither Mr Woolerton nor Mr Brown spoke in response.

The judges found that Mr Clarkson has not been shown to have spent more than $18,159.

Mr Clarkson's lawyers told the judges in their final submissions their client had spent $10,002.

If Mr Peters had been able to prove his rival had exceeded $20,000, Mr Clarkson would have been turfed out of office and a by-election held.

Instead the judges ruled there was "no reason" to believe corrupt or illegal practices had taken place in Tauranga.

Mr Peters said he was disappointed with the decision. He said: "This decision highlights in neon lights that there are no laws forbidding overspending.

"This development means that we have taken the first steps down the slippery slope of US-style politics in which wealthy candidates are able to buy their way into politics."

Mr Peters said he would be discussing the decision with his lawyers and pledged to fill the "now evident void in our electoral law" before the 2008 election.

He had no regrets about bringing the case.

Costs were reserved, with both parties asked to make submissions.

- NZPA, HERALD ONLINE STAFF