Under-fire John Banks will stand down as an MP at the next election, but plans to hang on as ACT leader until March.
In an emotionally charged media conference this morning, Banks confirmed he would not seek re-election.
He is facing trial early next year for knowingly filing a false electoral return over how some donations to his failed 2010 Auckland mayoral campaign were recorded. He has pleaded not guilty.
ACT now faces a challenge to find a suitable candidate to contest the Epsom electorate, and find a new leader to be selected at an annual conference.
Banks' presence at Parliament will also continue to dog coalition partner National, with Opposition parties already sharpening their knives this morning.
Banks continued to insist today that he did not knowingly sign a false return during the mayoral campaign and repeated his mantra: "I have nothing to fear and nothing to hide ... I'm not fearful of the process or where it will end."
But he said it was "now time for me to move on from this place".
Banks said he would still devote his energies to his constituents, but must now focus on a "long, triangulated legal process".
His decision not to stand for re-election to Parliament next year might look like an admission of guilt to some but it was not, he insisted. He did not consider quitting immediately as an MP.
"I've done nothing wrong so why would I resign?" he said.
By stepping aside, it would allow the party to "relaunch and re-gear."
"I'm simply not able to dedicate all my energy and ability on returning ACT to Parliament next year, in bigger numbers, while fighting through the courts to clear my name," he said.
He would not admit that his continuing presence as leader would tarnish ACT's brand, but said the party needed a "circuit breaker ... the narrative cannot be about me".
Prime Minister John Key said Banks made "the right call."
"I don't think that's a tremendous surprise," he told a radio station this morning.
"I actually, personally, think he's a guy that's had a very good and distinguished career in both local and central government. But I think he has made the right call for his family and himself."
Party President John Boscawen, who fronted the conference alongside Banks, believed ACT could retain Epsom.
"I have absolutely no doubt whatsoever, this is not the end of the ACT party," Boscawen said.
"I believe the ACT party can rebuild. We have run six very successful election campaigns."
Boscawen said he didn't want to speculate on whether Key would help ACT win Epsom.
"I don't know whether we are going to get John Key's help. I suspect we will ... I'm in the same position as [Conservative party leader] Colin Craig," he said.
The Conservatives are touted as a potential coalition partner for National next year.
The ACT board will meet by conference call in the next couple of days and open nominations for the Epsom seat. The candidate would be in place before the a party conference on March 1.
The new leader would also be announced at the conference, after a decision by the board.
Boscawen, a former MP, said he decided not seek re-election in 2011.
"It's a decision I don't regret one last little bit," he said, indicating he would not be the Epsom candidate.
Banks laughed when asked if it was a mistake that he returned to Parliament.
"It's been difficult ... this is a very different place to where I arrived with Robert Muldoon all those years ago," he said.
"It's much more feral, it's much more septic, it's quite a lot more nasty.
"The good side is the modern media is up to speed and instantaneous.
"Should I have come back? Hindsight is a wonderful thing ... if I knew what I knew now, would I have done things differently? Probably. But my life is never looking back."
Banks said the party couldn't re-gear "with me facing regular visits to court and a trial next year".
No-one was above the law, he said.
He would not discuss in detail the case, which centres on gifts from internet mogul Kim Dotcom and casino operator Sky City.
"My chances will be very good. I've never had a trial ... and I'm looking forward to a trial and I'm looking forward to clearing my name," he said.
The Greens were the first Opposition party to react to the news. Co-leader Russel Norman said "the wheels have well and truly fallen off the National-ACT Government".
"ACT may be distancing itself from John Banks, but, sadly, New Zealand is stuck with him till the next election," he said.
"A fundamental player of the National Act Government is so discredited his own party has rejected him."
Labour leader David Cunliffe said ACT leader John Banks should quit Parliament immediately.
"Clearly this is a Government that is propped up by the mad, the bad and the sad," he said today.
"It looks like Mr Banks is in trouble and should resign from Parliament.
"He has said that he cannot continue to do his duties as a leader of his party ... and secondly because it is not appropriate for the Government's majority to be propped up by somebody who is on electoral fraud charges."
Cunliffe said was counting the numbers not principles.
Labour respected the court process and the concept of innocence until proven guilty. However, he said Banks was a "disgrace" because of the "circumstances that lead to this place".
Banks responded to Opposition calls for him to go with: "Get a life."
Meanwhile ACT past president Catherine Isaac would not comment on whether she would run as a candidate or leader.
She confirmed she is "not really" involved with the party, beyond chairing the Partnership Schools Working Group.
Charter schools were a flagship ACT policy, with the first of five opening in February 2014.
- © Fairfax NZ News
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