Prime Minister John Key said Pita Sharples has made the right decision for the Maori Party by resigning as the party's co-leader.
Dr Sharples confirmed at a press conference this morning that he'll step down, saying it was for the purposes of unity in the wake of uncertainty over the leadership.
"The best thing I can do is create a space for change to happen."
He said he would stay as Minister until the election, but did expect to relinquish some of those responsibilities to his successor to allow him to have the mana of the role before the election.
He would also stay as a supporter and a leader within the party.
He made his decision with a "heavy heart."
"We are totally committed to the concept of having a large group of Maori within Parliament who are led by kaupapa Maori."
He said he had spoken to Prime Minister John Key who was saddened by his decision, but supportive of him.
Key: It's the right decision for the party
Mr Key said Pita Sharples had made the right decision for the Maori Party by resigning as the party's co-leader.
He said both Dr Sharples and Tariana Turia will be missed as co-leaders of the party, but it was right to transition the party to a younger leadership.
"It's quite clear they need to resolve their issues around leadership,'' said Mr Key on his way to National Party's caucus meeting this morning.
"I've really enjoyed working with Pita - both Pita and Tariana have been strong ministers, strong members of the Government.
"They have made a significant contribution in their time in Parliament and I think they'll be genuinely missed by a lot of people.''
Dr Sharples relinquishing his ministerial roles ahead of the election would not effect the National Government's arrangement with the Maori Party, Mr Key said.
"We will continue to have two ministers from the Maori Party holding Ministerial warrants outside Cabinet.''
When asked about Te Ururoa Flavell as a potential leader of the Maori Party, Mr Key said he was a very good and "solid'' MP. "We've enjoyed working with him.''
Key: Mana-Maori party co-operation with National "unlikely"
Asked about Maori - Mana Party cooperation, Mr Key said it was unlikely they would merge, and he hadn't had any indication from Tariana Turia or Dr Sharples that this would happen.
Mr Key would not comment on whether he would work with a Mana - Maori Party.
"The reality of Hone Harawira is that he's the one who wanted to be a minister under a National Government - now he's the one who doesn't want to be a minister.
"There are many things that Hone says that I'm deeply opposed to, and it would be difficult to see that working,'' Mr Key said.
"It's not a marriage made in heaven.''
Shearer: "Maori Party's time has passed"
Labour Party leader David Shearer said Dr Sharples and Mrs Turia "did an outstanding job" in creating the Maori Party, but added: "It feels very much as if the Maori Party's time has passed."
He believed the Maori Party's problems stemmed from its coalition with National, not its leadership battle.
"Maori out there don't feel that they've had a good run from the Maori Party being in coalition with the Government."
Asked whether he could work with Mr Flavell, Mr Shearer said he "had a huge amount of time" for the Maori Party MP.
"I believe he was once a member of the Labour Party, so his instincts are right. If he was able to share the same sort of policies, obviously we would consider that."
Flavell likely to replace Sharples in two weeks
Dr Sharples told the Herald of his decision yesterday, saying the uncertainty over the leadership was taking too much of a toll on the party and had given a perception of disunity.
He made the public announcement this morning, with co-leader Tariana Turia and Te Ururoa Flavell, who challenged Dr Sharples for his role in January, by his side.
Mr Flavell is likely to replace Dr Sharples after the Maori Party's conference in a fortnight.
Mrs Turia announced last year that she would retire from politics in 2014 and had suggested Dr Sharples follow her lead so the party could get its succession in place.
However, the two retirements have cast doubt on whether the Maori Party will be able to rebuild, given it is under fire for its relationship with National.
Mr Flavell refused to say whether he now expected to be made the leader, saying that was a decision for the Maori Party council at its AGM.
Turia - End-of-Maori-party talk just "politicking"
Mrs Turia said she believed it was the right decision, although it was Dr Sharples' decision to make.
"The majority of our people are under 35 years of age. We believe we need that voice to come through."
She said although they had taken a different view on the leadership, they had always been united.
She said talk that it was the end of the Maori Party was simply "politicking." She said Labour had lost more than 50 per cent of its vote in Ikaroa-Rawhiti while the Maori Party had held up its 2011 support.
She said Maori people needed to consider what they wanted.
"Our people need to decide whether they want to continue living a life of activism standing on the sidelines, or someone actually progressing their issues. That's what the Maori Party stand for."
Asked how it would affect the party's electoral chances, co-leader Tariana Turia said "What we've got to do is work hard to restore their faith to show that the progress made will continue. We have to stop believing it is individuals that make the difference. It is the kaupapa."
Dr Sharples said his decision was not in response to the Ikaroa-Rawhiti by-election result, but from his talks with people around the country who had raised the leadership issue with him. "It just came home to me."
He said "it's the end of a first burst - but it's not the end of an era."
Asked about a Maori - Mana Party cooperation, Mrs Turia said the Maori Party lived by tikanga and kaupapa and would work with anyone who supported that. Asked if Hone Harawira did, she said "you'll have to ask him."
Mrs Turia said she expected to stay on as co-leader in the meantime and possibly until the election. However, the party would look for her successor during the party's selection process.
She said there were young people within the party who were keen to come through.
"It's important for us to acknowledge that by 2050 this country will have a majority of Asians, Maori and Pacific. It's important for us to plan for that."
Mrs Turia said Maori had a perception that Labour had done everything for it, "in fact that's not true." She said the Maori Party was in a "very hard place" in its coalition with National, but believed it had made enormous gains by taking that on.
"There's no doubt National has a political agenda that doesn't sit comfortably with our people."