Act Party founder Sir Roger Douglas has thrown his support behind John Banks' leadership and described the scrutiny over donations to his mayoral campaign as a "total making of the media".

Mr Banks has come under renewed criticism over donations to his 2010 Auckland mayoral campaign after police released a report in which internet tycoon Kim Dotcom said Mr Banks asked him to split his donation so it would remain anonymous.

No charges were laid against Mr Banks but opposition parties have called for Prime Minister John Key to sack the Act MP for Epsom from his role as Minister for Small Business.

Sir Roger told TVNZ's Q+A programme today that Mr Banks was telling the truth over the donations.


"I believe Mr Banks, yes, and I believe that Mr Banks may well have said what we said to people who are possible donors - we told them the law," he said.

"What I'm concerned about is how John Banks has acted as an Act MP - has he done well or not. Well, I think he has done well."

Sir Roger said Mr Banks' leadership was consistent with Act's principles and was "probably more consistent than we've had at any time".

Mr Banks was maybe more conservative than the average Act member on social issues, but was in line with Act's principles on issues like welfare and education, he said.

Sir Roger agreed the donations saga was a sideshow which he said was "a total making of the media".