Prime Minister Bill English has indicated Todd Barclay didn't know his recording of a staffer's conversations could be illegal until a police investigation was launched.
English revealed he told police in April last year that Barclay had confided he left a dictaphone running in his electorate office and had recordings of former staff member Glenys Dickson criticising Barclay.
Barclay, who had publicly denied taping her and refused to co-operate with the police, won't seek re-election as Clutha-Southland MP in the September election.
Speaking to media in Auckland, English said during the dispute his advice to Barclay had been that "that wasn't good behaviour".
When a police investigation started it raised issues about possible offences and "I don't think [it] had occurred to anybody that there may be some potential offence", English said.
English said once there was an investigation established the possibility of an offence became clearer.
"But earlier on, for those who weren't involved it was hard to know what exactly happened. There was no implication of behaviour that could be an offence.
"But nevertheless, whatever was part of the employment dispute, there was a police complaint [and] the information I had I made available to police."
It is illegal to intentionally intercept private communications you are not a party to.
After a complaint by Dickson police investigated for 10 months but found insufficient evidence for search warrants and to press charges. They are now assessing recently-publicised information.
On Tuesday night Barclay said he "accepted" English's police statement, and the next day he announced he would stand down. He did not return a request for comment yesterday.
Yesterday English again rubbished cover-up claims by the Opposition, and said he had acted appropriately by informing [former electorate chairman Stuart] Davie and making his statement to police. He confirmed he did so after being contacted by both parties and clarified that he had been asked to speak to police. He had not reported the matter to police as he stated in Parliament on Wednesday.
Barclay's Tuesday statement was the first time he confirmed he had said recordings were made. He denied he had recorded Dickson at the National Party's Gore branch AGM in February last year, according to audio published by Newsroom.
However, yesterday English said delegates who reselected Barclay were "in full knowledge of the circumstances".
New Zealand First leader Winston Peters ramped up criticism of Prime Minister Bill English over the Todd Barclay affair yesterday - saying English should resign.
"He's got to go, Mr English. He's got to stand down, just like Barclay. He misled the media, he misled the House in every respect he is in serious breach of his responsibilities and duties," Peters said to media before parliamentary Question Time that saw further questions about English's actions.
Asked if English had lied, Peters said there was no other possible conclusion. Despite calling for English's resignation, Peters did not rule out going into Coalition with National after the September 23 election.
He said he had laid two privileges complaints against English, claiming he misled Parliament about whether he knew about the allegations against Barclay.
Before Barclay became MP, Dickson had worked for English, who held the Clutha-Southland seat for 18 years before becoming a list MP.
Amid rumours of secret recordings, former electorate chairman Stuart Davie last year texted English asking about the claims. English's February 21 response said Barclay had left a dictaphone running and picked up all conversations in the office.
He subsequently made his police statement, and released that this week after Newsroom published his text to Davie. English's texts and statement were entirely redacted by police when they released documents to the Herald under the Official Information Act in March.
Bill English on the record
• February 21, 2016: "He left a dictaphone running that picked up all conversations in the office ... the settlement was larger than usual because of the privacy breach." Text message to former electorate chairman Stuart Davie, published by Newsroom.
• March 1, 2016: Asked if he knew the reason for the resignations: "No. These are issues between them and their MP. I keep pretty clear of the electorate. It's not my job to run it, I'm finished [as an electorate MP]." Statement made in a press conference with reporters at Parliament.
• Tuesday morning, says he can't recall who told him Barclay had made recordings. "I was relaying what I had heard. I cant remember where that came from."
• Tuesday afternoon: "The substance of my statement to police is [Todd Barclay] told me there were recordings of his staff."