Peters today said Smith should "give up and go home".
"These bills come back to the House. They have a second reading then there's a committee of the whole House. All 120 MPs will then be studying the bill as to whether amendments should be made," Peters told Newstalk ZB's Mike Hosking.
The Green Party last week said it had to "swallow a dead rat" and support the bill in the interests of the Coalition Government.
The bill, which ensures Parliament's proportionality in the event that an MP leaves or is ejected from a party, is part of the Labour-NZ First coalition agreement but needs the support of the Green Party to pass into law.
Co-leader Marama Davidson said the Greens reluctantly agreed to support the Coalition to enact the bill. "We continue to oppose the idea that a party caucus should have the power to expel MPs from Parliament," she said last week.
Peters, the leader of New Zealand First, said if MPs were allowed to party-hop, it would destroy the democratic fundamentals of society.
"They've said that they had to swallow a rat. Well I could say something but I'm keeping my counsel here."