Sexual rumours are swirling around Labour MP Darren Hughes, who is on leave after a teenager laid a police complaint about a late night incident.

Mr Hughes, 32, confirmed he was the subject of an investigation and he was cooperating fully with police.

"I have done nothing wrong and I have full confidence that the legal processes will lead to the right outcome."

He said he had decided to publicly name himself.

"I am doing so because I think it is unfair that my colleagues should be subjected to speculation and suspicion."

He said he appreciated police needed to look into the matter properly and would not make any further comment until their inquiries were completed.

The complaint against him is understood to have been made by an 18-year-old man.

According to Newstalk ZB, the alleged incident took place on March 2, at Deputy Leader Annette King's Haitaitai home where Mr Hughes lives.

3News reported police had visited the house and removed some items.

The alleged incident took place after a Orientation week debate which Mr Hughes attended at Victoria University, after which the men went drinking in the city before returning to Ms King's house, 3News said.

Hughes on leave from Parliament

Mr Hughes is on leave for about two weeks while police make a decision - but has not been stood down.

If that took longer Labour leader Phil Goff said he would reassess the situation and may appoint acting spokespeople in Mr Hughes' roles.

The party last night held a crisis meeting over the issue, it was reported this morning.

Mr Goff said Mr Hughes had told him of the complaint a couple of weeks ago and assured him he had done nothing wrong.

He said he had no reason not to believe Mr Hughes, whom he held in high regard.

Mr Hughes was not sent on leave immediately because Mr Goff said he did not believe the complaint was relevant to Mr Hughes' ability to do his job as an MP.

He said Mr Hughes was coping "as you'd expect".

"It's never a pleasant experience for a complaint to be made against you as an individual and he is asserting very clearly he has done nothing, he believes, that is wrong."

He said he accepted Mr Hughes' word.

Mr Hughes was now on leave and Mr Goff said the leave was given with the expectation a police decision would be made within a relatively short period of time.

He would review that decision if the investigation took a long time.

"Because it's been made public, it's very hard for him to carry on with his normal duties. I didn't think the complaint was relevant to his ability to carry out his job. Because he is under that scrutiny now, it's very hard for him to do so, that's why I've given him leave."

If police found there was substance to the complaint, "then I will need to act accordingly," said Mr Goff.

He would not confirm if any other Labour MPs had dealt with the police over the matter or whether police obtained a search warrant for the residence Mr Hughes stays at when in Wellington.

Mr Goff would not comment on the incident or confirm the complaint was of a sexual nature because it was under police investigation.

"It is appropriate they carry out their investigation without any suggestion at all of political commentary or interference."

He said he did not know if it was politically motivated.

Asked if this was the end of Mr Hughes' career, Mr Goff said everyone had to be presumed innocent until proven guilty.

However Mr Goff said he would absolutely hold his MPs to the same standards as National MP Richard Worth, who resigned under a cloud after sexual allegations were made against him.

"You expect the highest standard of integrity in politics, and that's what I expect of my MPs... It's for the police to make a decision as to whether there's any substance and for me to then respond at that point."

Mr Goff also fingerpointed the National Party for leaking the story, saying he was told it had come from the Beehive. A journalist was told by a Labour spokeswoman that she was not aware of any complaint against a Labour MP.

Mr Goff said the spokeswoman was speaking in "good faith" at the time. He said only he and his leadership team had known about the issue.

Prime Minister John Key said he had heard of the allegation.

"I heard some rumours a few days ago but there's always rumours around Parliament."

How it was handled was "a matter for the Labour Party".

Wellington police this morning confirmed they were investigating a complaint involving a current Member of Parliament about an incident alleged to have occurred in an inner city suburb in the early hours of Wednesday, March 2.

Wellington District field crime manager detective inspector Mike Johnson said: "Inquiries into the matter are continuing but police are not seeking any assistance from the public at this stage."

Mr Hughes entered Parliament in 2002 when elected MP for Otaki aged 24, making him the youngest MP for the two terms he held the seat.

He had the smallest majority of any MP in the 2005 election, with just 382 votes more than National MP Nathan Guy, before losing the seat to Mr Guy in 2008 by 1354 votes.

Mr Hughes was whip in Helen Clark's government from the age of 25, before becoming Statistics Minister and associate social development and Employment Minister four years later.

An adept performer in the debating, he was also deputy leader of the House.

Mr Hughes last week led the winning team at a Press Gallery fundraising debate at the Backbencher pub, successfully arguing that politics is a grubby business.

He is currently a Labour list MP and is number eight in the caucus, with responsibilities as chief opposition whip and education spokesman. He has been picked as one of Labour's rising stars

Full text of Darren Hughes' statement:

"In this morning's media there were articles about an investigation into a senior Labour MP. I can confirm that I am that MP.

I am doing so because I think it is unfair that my colleagues should be subjected to speculation and suspicion.

I am aware that a complaint has been made to the Police and I am co-operating fully with them.

I have done nothing wrong and I have full confidence that the legal processes will lead to the right outcome.

I fully appreciate that the Police need to look into the matter properly, and until they have completed their work I will not be making any further statement."

- with NZ Herald staff, NZPA