Key Points:

Embattled MP Taito Phillip Field is resigning from the Labour Party but will still give his crucial vote to the Government.

That means the Labour-led coalition will be able to rely on his support in close-run situations.

He has been expelled from the Labour Party caucus and said today he intended to return to Parliament as an independent MP, but would still support the Labour Government.

The MP who is under investigation by police for alleged corruption, told reporters this morning that he would now sit in Parliament as an independent.

At a media conference at the Centra Hotel, in his Mangere electorate, Mr Field would not be drawn on what he might do at the next election, saying it was "hypothetical".

He said: "This government may have abandoned and more lately condemned me but I owe it my constituents to not allow the damage to my personal reputation to compromise the inclusion of their votes and support for a Labour government.

"I was elected by the Mangere constituents as a Labour candidate upon a Labour platform and policies, and in line with that mandate I offer my proxy to the Labour Government."

He thanked Labour Party president Mike Williams for his support but said the increasingly damning language of Prime Minister Helen Clark had been grossly unfair to him and the due process.

National Party Leader John Key said Helen Clark was now reliant on a "grand coalition of the unwilling".

He said: "No matter how Miss Clark tries to paint it, her Labour Government now faces the prospect of being held to ransom by potentially unreliable political allies, as each attempts to extract their pound of flesh from the new dynamic.

"With four parties inside the tent, the Greens on the outside, and the angry Mr Field sitting on the backbenches, Helen Clark will be forced to do a head count on almost every issue."

Miss Clark and Mr Williams decided the MP had to go after he appeared on television and said he would contest the next election.

They interpreted that as confirmation that he would stand against the Labour Party, a breach of the rules that warranted expulsion.

Mr Field later said he had been speaking hypothetically, and had not planned to leave the Labour Party.

The story so far

* September 2005 - Taito Phillip Field was accused of accepting cheap labour on his properties from people he helped with immigration.

* July 2006 - An inquiry by Noel Ingram, QC, cleared Mr Field of any conflict of interest as a minister.

* New allegations arose suggesting Mr Field or his wife misled either the Ingram inquiry or the Samoan Government.

* His former electorate secretary also claimed the Labour MP instructed someone to alter a Samoan birth certificate.

* August 2006 - Labour stands Mr Field down on full pay while the police investigate the allegations.

* Sunan Siriwan, the man at the centre of the allegations, spoke out from Samoa with claims that are vastly different from what he told the Ingram inquiry.

* Siriwan announces plans to file civil proceedings against Mr Field for not paying him for work done on the house in Samoa.

This week:

* Mr Field announces on Tuesday he will now talk to police as part of their corruption investigation.

Later that day Mr Field criticises the Labour Party in two interviews broadcast on TVNZ and TV3 in which he questioned the party's loyalty to him.

TV3 also reported that Mr Field had hinted off-camera he might take legal action against Helen Clark for labelling his actions "immoral" and "unethical".

* On Wednesday, Prime Minister Helen Clark writes to parliament's Speaker to inform her that Mr Field was no longer a member of the Parliamentary Labour Party.