Mana Party leader Hone Harawira is fending off claims that a byelection in his Te Tai Tokerau seat is a ridiculous publicity stunt mainly about the tens of thousands of dollars he stands to gain if he returns to Parliament as a party leader.

The independent MP launched his new party at the weekend and announced his intention to resign from Parliament and force a byelection, which costs about $500,000.

Mr Harawira justified it by saying he needed to renew his mandate under the new Mana Party.

As an MP, Mr Harawira has an annual base salary of $134,800.

As a party leader, this would increase to $148,500, but he would also be entitled to a $100,000 a year leadership fund, and $64,320 for each non-executive member of the leader's office.

A further $22,000 a year would be available for research staff and the whip's office.

For the six months before the election, Mr Harawira could be looking at as much as an extra $100,000 to set up his new party and leader's office.

Prime Minister John Key said forcing a byelection was "ridiculous in the extreme".

"It is nothing less than a costly political stunt that will cost taxpayers up to $500,000 and frankly achieve absolutely nothing.

"We will not enter into a working agreement with Mr Harawira either now or after the upcoming general election."

Labour leader Phil Goff also ruled out working with the Mana Party and called the byelection a farce.

"There's 21 sitting days from the time when a new MP is sworn in for Te Tai Tokerau to when the House is adjourned for the election campaign.

"Does the local member of Parliament need a mandate? Of course not.

"He's got it already. He's elected from that seat."