Colin Craig's former staff member Rachel MacGregor has broken a nine-month silence to reject claims of a sexual relationship with her old boss and says she feels she is being framed "as a mistress".
Ms MacGregor also accused the former Conservative Party leader last night of breaching a confidentiality agreement the two had signed with the Human Rights Commission, which followed her surprise resignation from the party two days before the September election.
The former press secretary, who now works in public relations, also urged Mr Craig to give her consent to break the confidentiality agreement so she can speak to the Conservative Party board about his conduct.
She said Mr Craig, who founded the Conservatives, had made "clear factual inaccuracies" at a press conference yesterday.
Ms MacGregor then went on to criticise him on Twitter saying she felt she was being framed as a mistress.
"There was never a sexual relationship, nor was there consent for his inappropriate actions."
Speaking to the Herald last night, Mr Craig said their relationship was not sexual in any way. "Absolutely not," he said.
Mr Craig said he was open to scrapping the confidentiality contract and allowing Ms MacGregor to speak to the board, but he was seeking legal advice first. He expected to make a decision today.
Mr Craig, a morally conservative politician whose party campaigned on family values, held his press conference earlier in the day to "set the record straight" on rumours about his decision to stand down as leader last week.
With his wife, Helen Craig, at his side, he admitted "inappropriate" conduct between him and his former press secretary, but rejected claims of sexual harassment.
Mrs Craig, in a rare moment in the spotlight, said her husband had been "falsely accused".
"Colin is a good man, and it has been distressing for me to see his character and reputation under constant attack," she said.
Mr Craig's statements did not appease some board members.
One, John Stringer, said he believed Mr Craig had omitted embarrassing details about his relationship with Ms MacGregor - including some text messages.
Asked about this claim, Mr Craig told the Herald: "I can categorically deny this." He also invited Mr Stringer to stump up the evidence.
Mr Stringer is seeking to have Mr Craig's party membership cancelled at a board meeting on Saturday, which would prevent him seeking re-election.
Party chairman Brian Dobbs said he had seen no evidence of crude texts. He also said that Mr Stringer was not a spokesman for the party, and was speaking in a personal capacity.
Mr Dobbs said Mr Craig had been upfront and honest and deserved a second chance.
After Mr Craig's resignation, there also had been rumours that he had made a payment to Ms MacGregor.
Yesterday, he said he had paid her $36,000 for work she had done for the party, after she had sought $50,000, and had forgiven a personal loan of $20,000 which Ms MacGregor had been given to cover her credit card debts.
Mr Craig said the $20,000 loan was in no way related to the allegations between him and his former staffer.