United Future Leader Peter Dunne has had an embarrassing setback after his party registration was cancelled because it did not have the 500 financial members required, despite its low $5 annual membership fee.

The Electoral Commission cancelled the registration today at the request of the party, and President Robin Gunston said although there were more than 500 members on its books, there were some inconsistencies so it could not say for sure that it had 500 financial members. He expected the situation to be temporary and resolved within a few months.

"We are certainly very confident that this will be sorted out and our registration restored.''

He said the inconsistencies related to the current addresses of some members, and whether or not they were still financial members.

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The cancellation of the party registration will not affect Mr Dunne's standing as a Minister or MP and he will technically still be United Future leader in Parliament. However, it is not yet clear whether it will affect his allocation of Parliamentary resources. As a party leader, Mr Dunne qualifies for an extra $100,000 a year to fund his work as leader, and $22,000 for research.

It will also impact on the party's election campaign if it can not reach the 500 member threshold in time for the next election. Unregistered parties can not seek the party vote and do not qualify for any of the free radio or television advertising in the broadcasting allocation.

The party is running large advertisements on its website, saying the party has ``been at the Centre of Government for over 10 years'' and urging people to ``join now''. The website said its membership fees were $5 a year.

Mr Dunne, who is in Parliament as MP for Ohariu-Belmont, would not comment on the issue but Mr Gunston told Radio New Zealand he was ``disappointed.''

United Future started losing some of its key members before the last election including former president Denise Krum, who stood for National in 2011. That prompted speculation that the party would not survive beyond 2012.

United Future was formed in 2000 after Mr Dunne's centrist United New Zealand party merged with the Christian Future New Zealand party. It reached a high of eight MPs in 2002, but was unable to maintain those numbers. It supported both the former Labour Government and National, which now often relies on Mr Dunne's vote for a majority.

News of the cancellation tops off a bad week for Mr Dunne, who has faced allegations from NZ First leader Winston Peters that he leaked a report on the Government Communications and Security Bureau _ a claim Mr Dunne has denied.