Prime Minister John Key is facing increasing questions about his handling of the Mike Sabin affair after the Northland MP's resignation a month after reports he was being investigated by the police.

Mr Sabin announced he had resigned yesterday, citing personal issues that were best dealt with outside Parliament. He would not make any further comments.

It is understood some within National learned Mr Sabin was dealing with issues before the election but he had already been selected as a candidate and it was too late to change.

Labour's Andrew Little and NZ First leader Winston Peters both questioned Mr Key's handling of the matter, including his repeated refusals to say whether he knew before the election or before he appointed Mr Sabin chair of the law and order select committee.

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Mr Little questioned whether Mr Key should have removed Mr Sabin earlier as chairman of that committee to protect the integrity of Parliament. Mr Peters said Mr Key clearly thought he could ride out any trouble but he owed the public an explanation.

Mr Key said yesterday his office was told on Thursday Mr Sabin intended to resign. He said Mr Sabin was not asked to step down.

"Mr Sabin reached that conclusion himself on the back of personal and family reasons he is pursuing.

"He's obviously made the best decision for himself and his family."

Mr Key would not comment on when he first learned Mr Sabin had issues to deal with, including whether it was before the election. He would not express confidence in Mr Sabin's character but said Mr Sabin had made a substantial contribution to the caucus and was well regarded as an electorate MP.

After the election, Mr Sabin was made chairman of the law and order select committee over more senior MPs - a sign he could have been on the way to the ministerial benches.

The resignation will result in a by-election in Northland, likely to be within two months. It is up to the Prime Minister to set the date and that is likely to be as soon as possible. Mr Sabin's resignation will have an impact on the Government's majority until the seat is filled. It will need the support of at least two of its three support parties to pass legislation. It usually requires only one. That could mean holding off on proceeding with measures such as the Resource Management Act amendments if they cannot muster the support.

Mr Key said National could easily command a majority. Mr Key said he was confident National will hold the electorate. Mr Sabin won with a majority of more than 9000 last year.

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Mr Little said Labour will stand in the byelection on a platform of jobs and housing but effectively conceded defeat in advance, saying Labour polled just 16 per cent in Northland in the election.

"It has been a National stronghold for a long time and I doubt whether that will change," he said.

Labour's candidate last year was Far North District councillor Willow Prime.

It has sparked speculation Mr Peters will also stand given he has a strong base in Northland. Mr Peters would not say whether he was considering running himself.

"This is not the plains of the Serengeti where we gather like animals at the first sign of a weak animal," he said.

As a safe National seat it should be a sought-after electorate. Mr Sabin won the selection against four other candidates in 2011 after the resignation of long-term MP John Carter. Mr Carter, now the Far North Mayor, declined to comment yesterday.

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Possible candidates include Matt King, a former policeman who owns a private investigation company.

Northland-based National Party board member Grant McCallum would not comment on his own ambitions.

School principal Mark Tan is understood to have come a close second to Mr Sabin in 2011, but is unlikely to seek selection this time because of a young family.

Construction company owner Kevin Rintoul has since set up his own party - Focus NZ. That may mean he is disqualified from standing again.

The electorate used to have the highest number of members of any National Party electorate.

However, sources in Northland said that had changed since Mr Carter's departure.

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Northland electorate

• National stronghold.
• Retained by Mike Sabin last year with a 9,300 vote majority.
• Prime Minister John Key will announce the by-election date.