A school principal paid the family of a former student in a secret deal to ensure their silence over an allegation he propositioned the girl.
Kawerau College principal Steve Hocking also confessed to the Herald on Sunday he had turned to drugs after falling into a "dark hole".
Although school management were told of his cannabis use and the secret payment, the board of trustees did not pass on the information to three teams of inspectors from the Education Review Office.
Hocking, who turns 47 today, said professional education investigators were collecting evidence for an inquiry into his time at the school in the Bay of Plenty paper milling town.
But he is vowing to fight for his job - and told the Herald on Sunday he would not "fall on my sword".
"I'm a normal red-blooded male who has done things that I've regretted over the years. I've made mistakes, just the same as everybody else."
After speaking with numerous school sources, parents of previous students and residents, the Herald on Sunday can also reveal:
* Affidavits have been signed claiming Hocking smoked cannabis with a newly graduated student. Hocking denies this allegation.
* Serious questions have been raised over Hocking's appointments while principal. Hocking denies this and said he appointed his new partner as chief executive before they got together.
* There are issues of financial mismanagement at the school involving the Tertiary Education Commission and hundreds of thousands of dollars. Hocking said he had referred a matter to the Serious Fraud Office but refused to elaborate. The school's latest ERO report acknowledges "a serious financial situation" with the "potential to adversely affect educational outcomes for students". Another ERO team is due in the school on February 23.
* Former board of trustees chairwoman Lynette Dolman said three ERO teams had visited in recent years and none were told "about Steve's antics because the school has functioned beautifully".
* There have been about four personal grievance cases at the school in the past two years, involving at least one payout. The latest involved a senior teacher who felt forced into medical retirement after he was king-hit by a fourth-form student. Lawyer David Sparks said he had represented two clients in such cases but could not comment further.
When the Herald on Sunday approached Hocking in his office on Friday, he said he was expecting the visit. He answered questions clearly, and admitted paying the former student's family over remarks he made in the Kawerau Hotel.
The amount is understood to be $1000 but Hocking refused to confirm the figure.
The girl, who held a senior school role, was a recent graduate and aged 17 or 18 at the time of the incident. The Herald on Sunday has agreed not to name her at her family's request.
Hocking refused to reveal what he said, but denied doing anything wrong. He said he only paid out "for the benefit of the college" and had "wanted an end to the matter".
The girl's father said Hocking sexually harassed his teenage daughter, humiliating her in front of witnesses by saying, "I want to take you home and f*** you".
The father said there were several witnesses and one person punched Hocking. He said his daughter was emotionally affected by the public incident for a long period.
Hocking met the family and a mediator and apologised. The father said Hocking agreed to seek appropriate counselling and offered to pay compensation "for the trouble he had caused".
"When he presented [the money], I was like, 'I don't want your damn money, I just want you out of your job'."
His daughter accepted the money and put it towards her studies. The father claimed Dolman knew of the incident and said he hoped she would sack Hocking. He had "lost respect" for the school over their inaction.
He had "worried over the years" about Hocking being in his position of power and many felt he was a womaniser. Hocking denied this.
The father had met Dennis Finn, an investigator hired by Ministry of Education consultant Lex Hamill, and told him he hoped Hocking would be ousted.
Dolman's successor as board chairwoman, Sheneen Simpson-Almond, referred Herald on Sunday inquiries to Hamill.
Hamill would not confirm or deny an investigation was taking place.
Asked about his drug use, Hocking said it had been during a "dark time" a few years ago and it had given him a "greater understanding" of some of his pupils who also smoked cannabis.
"I went through a difficult time, personal issues, a marriage break-up. I was stressed and working very hard to turn the school around.
"I willingly went to the board chair and senior management and put my future in their hands."
He said his offer to resign was rejected, but he was given a written good behaviour agreement by the board which was torn up late last year.
Education Minister Anne Tolley said she was aware of the allegations against Hocking but would not comment further.
* Kawarau College in the news
October 2008: Steve Hocking stands by a 25-year-old teacher after semi-naked pictures of herself were circulated by email. Hocking said the woman had naively sent the pics to a so-called friend.
2008: Former National MP Katherine Rich asks then Education Minister Steve Maharey if he has confidence in the Teachers' Council after the college unwittingly hires a man who had uploaded more than 50 pornographic pictures of himself on the net.
November, 2004: The school is forced to withdraw its yearbook after pupils used it to boast about their drug habits, gang connections and parties.
May, 2001: Hocking goes public about rejecting random drug tests for students, saying too many would show positive results through passive smoking around adults.