New Zealand First leader Winston Peters says neither he nor any of his party's ministers instructed Jenny Marcroft over her approach to National MP Mark Mitchell about the $1 billion Provincial Growth Fund .
"I didn't instruct her and my information is that nobody else did," Peters said.
Mitchell has claimed Marcroft told him to pull out of a group for the Mahurangi River Restoration Project in Rodney and stop questioning Regional Development Minister Shane Jones about the fund. If he didn't, the project would not get funding from the Provincial Growth Fund.
Mitchell claimed Marcroft told him a minister had sent her to talk to him.
Peters said he was not party to the conversation, but he believed Marcroft had been trying to tell Mitchell that the Mahurangi River Project was not strictly eligible for funding under the Provincial Growth Fund because it was within the Super City region.
"And then things went from there to being confused as to what was said."
He had told Marcroft to apologise to Mitchell for any misunderstanding after she told him Mitchell was angered by their conversation.
Opposition leader Simon Bridges labelled the episode as "rotten politics".
"This is not how we should do democracy in New Zealand. It's not the way we do things and National's not going to stand for it."
He said it was not credible to say that Marcroft was acting on her own.
"This is someone who is a very new MP. She made it quite clear to Mr Mitchell that effectively she was there to deliver a message. I find it a real stretch to believe she was delivering that message on her own behalf, and she wasn't delivering it from someone more senior."
Prime Minister Jacinda Ardern said she had spoken to every NZ First minister.
"I've been assured by each of them that they are not involved, have not given any instruction for any MP to act on their behalf."
Ardern said it was up to individual party leaders to deal with matters involving their backbench MPs.
Peters said he did not see any reason to take further action against Marcroft.