Prime Minister John Key has accepted with sadness the resignation of Dr Nick Smith from his ministerial portfolios.

The resignation came after intense media questioning of Dr Smith's judgement to support an ACC claimant while he was minister during the previous term.

The following ministers will act in portfolios previously held by Dr Smith: Gerry Brownlee in Local Government, Craig Foss in Climate Change Issues and Chris Finlayson in Environment.

Dr Nick Smith's speech to Parliament


Mr Key acknowledged Dr Smith's "huge contribution" to the National government but said he expected higher standards of his ministers.

"It is important that Ministers are seen to actively manage both real and perceived conflicts of interest in the exercise of their duties," Mr Key said.

"I have always expected high standards from my ministers - and I will continue to do so.

"Dr Smith has been a hard-working and diligent Minister, but perceptions do matter and he knows he has let himself down.

"I am very disappointed to have lost such a capable Minister. Dr Smith has made a huge contribution to the National Party and to this Government.

"Dr Smith did excellent work in the climate change issues, local government and environment portfolios. His obvious expertise in these, and other, complex areas will continue to be valued by our Caucus."