"Trevor Mallard apologises for the distress and humiliation his statements caused to the individual and his family."
The staffer was stood down in May after Mallard's comments but an investigation later found no wrongdoing.
The man then sought to sue Mallard for defamation, seeking damages of $400,000 and exemplary damages of $50,000.
The $333,641.70 cost of settling the defamation case settlement were released to National in answers to written parliamentary questions.
National leader Judith Collins said the party had now lost confidence in Mallard.
"This is unacceptable behaviour from the Speaker of the House. This sheer size of this pay-out illustrates how serious the matter is," Collins said.
"It is the Speaker's job to set the standard of behaviour for everyone at Parliament but he has been reckless with his words, resulting in taxpayers footing a bill of more than $330,000 to clean up this mess.
"There has been no formal apology to Parliament for this, despite the National Party encouraging the Speaker to do so on the final sitting day this year.
"Because Mr Mallard has not lived up to the high standards of behaviour that he has set for Parliament, we believe he is no longer fit to hold the role of Speaker.
"The people who work at Parliament, and the taxpayers of New Zealand, deserve better."
In August, the Speaker issued new 'directions' (rules for MPs funding and spending), which expanded the range of legal costs MPs could have funded from the taxpayer purse, to include "damages and payments to settle a legal action."
In the past, that funding was only available for legal costs to defend the legal proceedings taken against them in their capacity as MPs - and not for settlements.
To get approval for it, it has to be signed off by the Speaker and chief executive of Parliamentary Service.
They must "consider the extent to which the member's involvement in the proceedings is due to the member acting in their capacity as a member of Parliament."
The money usually comes out of a political party's overall pool of funding.
There are separate provisions for Cabinet Ministers' legal costs.
In cases where Cabinet minister are sued for something such as defamation, the Cabinet Manual said Cabinet will decide whether their legal costs are covered – and whether to pay for any costs or damages awards if the Minister loses in court.
That depends on the circumstances in each case. The Cabinet manual is silent on whether public funds can be used for a settlement.
How the saga unfolded
In June last year, Mallard said that he believed a rapist was working in the parliamentary precinct a day after the Francis review of the parliamentary workplace was released.
The report found systemic issues of bullying and harassment, poor conduct too often tolerated and normalised, and a perception of low accountability. Mallard himself commissioned the report after a series of cases of bad behaviour.
Mallard had said that he believed a man was responsible for three serious sexual assaults mentioned in the review, and that he believed the man was still working at Parliament.
His comments - called shocking by some parliamentary workers - sparked a series of turbulent events that led to a historical assault complaint and a parliamentary staffer being stood down.
Mallard then said that a threat to safety had been removed from the premises.
The staffer then lashed out at Mallard, saying he felt bullied out of the workplace and was the victim of Mallard's "slanderous" comments.
After Mallard made the comments, the man - who had been stood down from Parliament - told Newstalk ZB he felt bullied out of the building.
He said at the time he wanted an apology for what he described as the Speaker's "slanderous" comments.
The man claimed the three allegations were related to hugging a colleague, complimenting another colleague on her hair, and kissing another on her cheek as he said goodbye to her after she visited him and his wife for tea.
However, the first complainant alleged he hugged her from behind, pushing his groin up against her, and that he was staring at the breasts of the woman who's hair he complimented.
He believes the third complainant was put up to lodging the complaint by someone else.
The man was investigated by Parliamentary Services, which found the claims were unsubstantiated.a
