NZ First MPs and Labour's Trevor Mallard have walked out of Parliament in protest after Speaker David Carter allowed United Future MP Peter Dunne to keep the extra funding and entitlements that come with being a party leader, despite the de-registration of his party.

Mr Carter announced that decision today, but both Labour and NZ First objected, saying if Mr Dunne's party was not registered then it clearly did not meet the rules required for those resources.

Labour MP Trevor Mallard also described the decision as a "farce'' and when asked to apologise, he refused and opted to leave the Debating Chamber.

After objecting, NZ First leader Winston Peters said that if Mr Carter did not produce the legal advice he based his decision on, then his party would boycott Parliament until that happened.


His caucus then left Parliament after the Speaker refused to discuss the matter further, beyond saying he had received advice on it before making the decision.

Earlier, Mr Mallard had argued that as well as extra funding, party leaders held certain positions, such as membership on the important Business Committee, which Mr Dunne should no longer be entitled to.

Mr Mallard said it was the wrong decision because Parliamentary rules required a party to be registered with the Electoral Commission for those entitlements to apply.

His colleague David Parker said if United Future was not registered, then in effect Mr Dunne and independent MP Brendon Horan should be treated the same.

Winston Peters had said the Speaker should have acted as soon as the Electoral Commission advised that the party was no longer registered.

Leader of the House Gerry Brownlee said Mr Dunne was elected as a party leader in 2011 and was entitled to continue to be recognised as such.

Mr Carter said he accepted that the points made were genuine, but said he had made his decision.

On the way out of Parliament, Mr Dunne told reporters that MPs had to have confidence in the Speaker's decisions.

"If you lose confidence in the Speaker then frankly you start to lose confidence in the whole system.''

Asked about Mr Peters' and Mr Mallard's actions this afternoon, Mr Dunne dismissed it as "just game playing and I think they should answer for their behaviour''.

"I think the public will look at them and say these are children playing children's games.''