Act leader Rodney Hide is set to resign as party leader, when he makes an announcement in Auckland at midday.

Dr Don Brash, who will become Act's new leader, will also be at the announcement.

Hide is expected to say he'll stay on in Parliament until November's election, with Prime Minister John Key yesterday confirming Hide would keep his portfolio as Minister of Local Government.

Brash cautiously optimistic

This morning Dr Brash was "cautiously optimistic" he would be the leader of the Act Party by the end of the day.

A vote could be held at the next caucus meeting on Tuesday, but if Mr Hide has lost majority support of the party, the former National Party leader said it would be "logical" he step aside.

The party's newest MP, Hilary Calvert, appears to hold the balance of power and is tipped to side with Dr Brash.

Dr Brash hosted Ms Calvert and Act founder Sir Roger Douglas together yesterday.

He told Radio New Zealand this morning he has not heard Ms Calvert is definitely backing him "in so many words".

"She hasn't said 'Don, you've got my vote - I'll back you'," Dr Brash said. "I expect that before she tells me that she will want to tell her own leader that."

Ms Calvert, a Dunedin lawyer, entered Parliament in September last year when MP David Garrett quit in disgrace after revelations that he had committed identity theft and had an assault conviction.

On Sunday, she said that she backed Mr Hide and would vote for him over Dr Brash, and on Tuesday she repeated that position.

But yesterday, when the Herald asked if her position was still the same after her meeting with Dr Brash, she said: "I'm not prepared to make any comment."

Sir Roger and MP Heather Roy have been firmly in the Brash camp, having had clashes with Mr Hide over his leadership style.

Ms Calvert's vote would give Dr Brash a 3-2 majority to become leader.

Dr Brash said the future of Rodney Hide in the Act Party - should he be dumped as the party's leader - is "a decision for another day".

"I think there would be difficulty perhaps in his staying on in Parliament. It is always tricky for a leader who has been rolled to stay on in Parliament, I didn't myself when I resigned in late 2006."

Last night, Mr Hide said he did not know if he had majority support in caucus.

"The caucus and the board need to make their own decision ... What I've always done is accepted that I'm the leader while I have the support of the caucus and the board," he told Campbell Live.

Even if he knew he had the numbers, he said, he would not proclaim victory as he was not that arrogant, "because I serve at the pleasure of the party".

If he was rolled, Mr Hide said, he would continue to "support John Key and work to honour the confidence and supply agreement".

"But Don Brash has been very clear about my future ... He said there's no room for me in Parliament."

Dr Brash several times referred to Act as though he already belonged to the party.

"If I can't get 5 per cent [of the vote] I shouldn't be trying to do this ... We should be getting much more than 5 per cent."

Asked why people should vote for Act in Epsom when he was so critical of National, he said: "We are the only party in Parliament which is even remotely akin to what National stands for."

Dr Brash reiterated yesterday that he would like to see John Banks, former Auckland City mayor and National Party Cabinet minister, stand for Act in Epsom.

Dr Brash told the Herald he personally would better serve the party by gathering support throughout the country rather than being beholden to an electorate, although he probably would stand in an electorate seat.

Once it is clear that Dr Brash has the numbers, he is expected to apply for membership of the Act Party.

Party president Chris Simmons has said the board is unlikely to oppose the caucus choice of leader, even though it can do so.

THE PLAYERS
* DON BRASH

A former Reserve Bank Governor, he has been repeatedly wooed by Rodney Hide as a potential deputy or co-leader of Act.

He was elected to Parliament in 2002, and became National Party leader in 2003.

He came within a whisker of winning the 2005 election for the National Party, but resigned in 2006 after John Key became party leader.

* RODNEY HIDE

Elected a list MP in 1996, became Act leader in 2004 and has been the MP for Epsom since winning the seat in 2005.

He won the seat again in 2008, but has lost popularity after a series of scandals that hit him and the party in the past 18 months.

These included using taxpayer-funded travel perks to take his girlfriend - now wife - overseas, his falling-out with Heather Roy and the resignation of MP David Garrett after an identity-theft offence was revealed.

* WHAT HILARY CALVERT SAYS
SUNDAY

Supported Rodney Hide and would vote for him over Don Brash.

TUESDAY

Reconfirmed what she said on Sunday.

YESTERDAY

No comment, after meeting Brash.

- Additional reporting: Nicholas Jones