Phil Heatley has resigned from his housing and fisheries portfolios over an error in his expense accounts.

At a media conference today, Mr Heatley said he had offered his resignation to Prime Minister John Key this morning, and the resignation was accepted.

Click here to read the full statement.

"It's been a privilege to serve the people of New Zealand as a Cabinet minister in this National Government but I believe I've failed to live up my own standard and for that I'm embarrassed and immensely sorry," Mr Heatley said.

"The decision today comes after I've had a closer look at my ministerial credit card expenses covering the past 18 months.

"As I explained earlier this week,I was not as familiar as I should have been with the rules, in fact I was careless."

Mr Key issued a media statement saying he would advise the Governor-General to accept Mr Heatley's resignation.

He said Mr Heatley had asked that the Auditor-General conduct an audit into his ministerial expenses.

"My officials have been working with the Audit Office since yesterday when this latest issue arose, and the investigation will start this afternoon."

Mr Key said he had learned yesterday that a $70 expenses claim from Mr Heatley was supported by incorrect documentation.

uot;The expenses claim characterised the spending as "Minister and Spouse: dinner". The actual credit card receipt was notated by him as 'Minister and Spouse' for 'Food and Beverage'.

"The credit card was used for two bottles of wine for his and his wife's table at the National Party Conference."

Mr Key said he expected high standards from his ministers "but I'm also prepared to accept that everyone is human and from time to time, people make mistakes".

He said he had "no reason at this stage to believe that Mr Heatley has been dishonest".

Speaking to reporters this morning, Mr Heatley apologised and promised to pay back any money that was wrongly billed.

He said his accounts showed an error in addition to that already highlighted this week: an expense claim charging two bottles of wine as "food and beverages".

"But rather than arguing semantics about whether this was deliberately misleading or not, I have decided that this was one step too far and I offered my resignation to the Prime Minister this morning," he said.

"I have no desire to become the focus of distraction for this Government."

The expenses form shows two transactions on August 1, 2009, at the time of the National Party Conference.

They are:

Minister and spouse - CHC airport - $59
Minister and spouse - Dinner $70

Mr Heatley said it was the second transaction that was inaccurate, as he had signed the receipts for both as "Food and Beverage" expenses for the "Minister and spouse".

The receipt is from AMI stadium.

The receipt for $59 is from Barcelona Restaurant at Christchurch Airport.

Mr Heatley said he would stay on in Government as MP for Whangarei and he thanked those who have supported him over the "tough" past few days, including his family and electorate supporters.

When asked if he wanted Mr Key to accept his resignation, he said: "I wanted him to accept it because I meant it. I wanted to resign.

"I haven't lived up to my own standards. I think I need to spend a long time on the back benches."

Mr Key said he had asked Maurice Williamson and David Carter to act in the Housing and Fisheries portfolios for the time being.

Mr Heatley handed in his credit card and paid back about $1100 on Tuesday, when it was revealed he used his ministerial credit card for personal expenses, including a family trip in the South Island.

He made an emotional apology, saying any misuse had been unintentional.

He was close to tears as he cut up his credit card in front of journalists.

Last year, Mr Heatley used a 75 per cent airfare discount available for MPs on a holiday with his wife in the Cook Islands.

In October, it was found he had spent only $813 on his own international ministerial travel, but racked up $11,302 on his MP's perk.

And when Mr Key introduced an MP housing allowance limit at $37,500 a year, Mr Heatley's Wellington residence was found to be $15,838 over budget.

He defended his apartment's cost saying he had young children he wanted to live with in Wellington.

He rented a Wellington apartment for $946 a week, and also owned another he rented out to fellow National MP Louise Upton for $355 a week Mr Heatley, 42, has been Whangarei's electorate MP since 1999.

He served as the National Government's Housing and Fisheries Minister since the last elections.

Mr Heatley is the second minister in John Key's Government to resign, after Richard Worth.

MPs' and ministers' expenses for the October-December 2009 period were released today. Mr Heatley claimed $42,902 during the three months, in line with other ministers' claims.

- With NZHERALD STAFF