Labour MP Stuart Nash pulled the pin on his own fundraiser at the Northern Club today, saying it would be inappropriate to attend because of the involvement of right-wing lobbyist Matthew Hooton.

Hooton is an old friend of Nash's and had been involved in organising the fundraiser of about 20 of Nash's friends since 2014.

Nash's decision came after the Herald learned the $1000-a-head lunch was also a fundraiser for Hooton.

Nash said his decision to pull out was because Hooton had criticised Labour and his fellow Labour Minister David Parker in recent days over the ban on foreign buyers in New Zealand - criticism Parker has said was unwarranted.

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"In light of Matthew's attacks on the Government, in particular David Parker, I've decided it is no longer appropriate to attend the fundraiser with Matthew so I have pulled out."

About 20 people, a mix of Hooton's clients and old friends and acquaintances of Nash, were due to attend the lunch at the Northern Club today.

The event went ahead without him and Nash said he had offered refunds, minus the cost of the lunch, to all those who turned up but would keep the "donations" of those who did not want a refund.

"The money was never for me, it was always for the Napier Labour Party," he said.

The Herald had learned some of those attending were to contribute their $1000 towards Hooton's legal costs in a case taken by former National minister Steven Joyce rather than to Nash.

Joyce took legal action over a column Hooton wrote about him in National Business Review.

Hooton had reached a settlement with Joyce, but NBR has so far not settled.

Hooton said the fundraiser went ahead without Nash and nobody asked for a refund. "It was a very successful fundraiser for the Napier Labour Party with one empty seat – although that did not make too much difference."

Nash told the Herald yesterday the fundraiser was held in his capacity as Napier MP rather than as a minister and the funding would be used for his local campaign.

He hoped to raise about $15,000. Nash did not mention Hooton's involvement when speaking to the Herald at that point.

Labour Party President Nigel Haworth said while fundraising events did not only have to involve Labour supporters it was probably the right decision for Nash not to attend on this occasion.

"It is entirely appropriate for an MP to organise a fundraiser. But I can understand there is a significant degree of sensitivity given the comments of Matthew Hooton. I think that's something an MP who is thinking about such an activity would have to consider carefully and he has done just that."

He said he had not known about Nash's fundraiser but would not expect to be told of every local fundraiser.

Labour has come under fire for holding party fundraisers at the private The Northern Club and The Wellington Club at which those invited paid $600 to hear Finance Minister Grant Robertson speak.

Haworth said Robertson was speaking as an MP rather than a minister - although the invitations described him as Finance Minister and he spoke about the Budget.

Although they do not break any electoral rules, Labour had criticised National for similar events involving the Prime Minister and ministers when it was in Government.