Prime Minister John Key has told his ministers to get advice on any potential conflicts of interest following a slip-up by Internal Affairs Minister Richard Worth.

The warning came after Dr Worth visited India and spoke in his ministerial capacity while promoting a private company in which he had an interest.

He resigned yesterday as a director of New Zealand Aviation, which is linked to an Invercargill air training academy that wants to train Indian pilots.

Mr Key said he understood Dr Worth was resigning today from another company he has been involved with.

While he accepted Dr Worth's actions while promoting trade relations between New Zealand and India were not sinister, they were "stupid" as there was an obvious perceived conflict of interest involved.

"I don't believe he was doing that for beneficial gain. He had been working on that for a long period of time - and actually it's important.

"But the reality was, he put himself in a position that was stupid, because he allowed the perception to be created."

Labour leader Phil Goff responded to the incident by saying a Labour MP in the same position would be stripped of their portfolio.

"I think the Cabinet manual is very clear. There can be no room for conflicts of interest of perception of conflicts of interest. Richard Worth feels he has done nothing wrong," Mr Goff said

"Mr Key has said he is wrong, has made a mistake and he's running out of patience. We were promised `one strike, your out', clearly this no longer applies in terms of the high standards that the prime minister talked about."

Mr Goff said Dr Worth had to answer questions such as who had paid for the trip and what he said while on it.

Mr Key didn't go as far as saying Dr Worth was on a last warning, but that he had a "limited patience" over such issues.

When Dr Worth spoke to Mr Key over the issue his argument had been that New Zealand Aviation wasn't trading and he wasn't actually a shareholder or director of the entity that was engaged in trying to get people to go to the Southern Institute of Technology.

Trade Minister Tim Groser was also a director of New Zealand Aviation, but he resigned after being appointed to the Cabinet.

Mr Key said he was comfortable with Mr Groser's handling of his situation, despite his resignation coming a couple of months into his role.

He said today that ministers needed to be totally satisfied that their affairs could be displayed openly and come up to scratch and should get advice from the Cabinet office to clarify guidelines.

"I don't think you can expect every minister to be a walking encyclopedia when it comes to the Cabinet manual, but they can certainly go and communicate with them and seek advice, and that's what I encourage them to do."

Mr Goff said both Dr Worth and Mr Groser should have resigned their directorships immediately.

As a former trade minister, Mr Goff said he could not believe that Mr Groser had continued to be a director of a company while getting confidential information and insight

- NZPA