Regional Economic Development Minister Shane Jones says he did not push for a Northland tourism project that he had a perceived conflict of interest in, and which was given up to $4.6 million from the Provincial Growth Fund.
But Act leader David Seymour says Jones is unfit to be a minister after he gave assurances about the project's viability in a meeting with ministerial colleagues about the proposal.
Seymour has written to Auditor-General John Ryan asking him to investigate Jones' role.
In February last year, the Government announced the funding for Manea Footprints of Kupe to build a cultural tourism centre on Northland's west coast.
Jones declared a perceived conflict of interest over Manea when its funding application was made in November 2017, and asked that any PGF decisions about the project be made by other ministers.
He said he had advocated for the project when he was a Labour MP and knew the late Whetu Naera, a Hokianga Chief, who was a key proponent of the project.
"I neither had nor have any other interest in the project. My declaration related to a perception of a conflict of interest," Jones said.
Documents obtained by Stuff show that Jones was proposed as the chair of Manea in 2014, but Jones has dismissed this as "wishful thinking" from Manea.
Eleven days before the announcement approving the $4.6 million project, Jones discussed the Manea proposal in a regular PGF meeting with Tourism Minister Kelvin Davis, Economic Development Minister David Parker, Transport Minister Phil Twyford and Finance Minister Grant Robertson.
Notes about the meeting - released under the Official Information Act - showed that Jones reassured Robertson about the project's viability.
"Minister Robertson raised his concerns about the broader management and commercial operations of the project," an email about the meeting from Ministry of Business, Innovation and Employment official Mark Patterson said.
"Minister Jones provided reassurance that, as the project has Far North Holding Ltd, the commercial arm of the Far North District Council, involved in its governance structures, he was comfortable their presence would alleviate any concerns on the issue.
"Minister Robertson was comfortable to sign the briefing knowing this mitigation was in place."
Jones said his comments did not amount to advocacy as he provided "factual, publically-available information ... when an issue was raised during a discussion in which I otherwise took no part".
He said the other ministers decided the fate of the proposal.
"I was not one of the decision-making ministers."
It is unclear whether the ministers were aware of Jones' conflict of interest, but it seems likely because it was noted in an MBIE briefing to the ministers that was provided days before their meeting.
The Cabinet Manual says a minister has to declare perceived conflicts of interests, and affected issues can be transferred to another minister.
The minister also needed to consider whether it was appropriate to be present at Cabinet or Cabinet committee meetings that discuss issues involving the conflict of interest.
Seymour said Jones' involvement meant he was not fit to be a minister.
"Given he was to be the project's chairman, Shane Jones has a clear conflict of interest in relation to Manea. It is deeply concerning that he would intervene when it was completely inappropriate for him to do so," Seymour said.
"The Prime Minister has no choice but to sack him."
Through a spokeswoman, Jacinda Ardern said: "Based on both the information and advice I've received, the conflict of interest was managed in accordance with the Cabinet Manual so therefore I would have no cause to sack Minister Jones."
National Party regional development spokesman Paul Goldsmith said Jones needed to explain his actions.
"The Prime Minister should haul him into the office and get him to reconcile what appear to be irreconcilable statements: that he wasn't involved, and that he was at the meeting and seems to have been very active.
"On the surface of it, it's not a good look, and not the way we do things."
The Taxpayers' Union also called for the Auditor-General to investigate.
"Shane Jones' behaviour will give taxpayers zero confidence that the Growth Fund is being spent impartially or for economic good," union spokesman Louis Houlbrooke said.