Winston Peters stands by his assertion he was approached to do a post-election deal with National with Judith Collins as leader, but the prime minister says Peters is headline-grabbing.
The NZ First leader today said he was prepared to swear an affidavit that he had been approached about the possibility of working with Collins, if he didn't want to work with Key post election.
Peters said he believed the approach had been an attempt to undermine the prime minister and that Justice Minister Collins was likely to have been aware of it.
Key said it would "theoretically" be a sackable offence if Peters' allegation of treachery, which would amount to an attempt to roll him as party leader, were true.
"But it won't be true," Key said.
Peters said this afternoon Key must know by now it was true.
"I do not resile from a word I have said. I'm happy to do an affidavit knowing full well that doing a false affidavit is to commit perjury, which is a criminal offence.
"And as someone who is both a lawyer and a politician I am not going to do that in terms of not being able to stand by my comments."
Peters said a person had "deliberately bumped into" him earlier this year, in an approach that was authorised by another MP.
He said he was "disturbed that that was the nature of politics they were pursuing", and had seen the approach as an attempt to roll Key.
"It sounds like that to me, and that means there was serious instability being pointed to," Peters said.
"That's how obsessed with power some of those people are, and they were prepared to get rid of the leader who may not be able to stitch up the deal [Key], for someone that they thought could [Collins]."
Peters would not disclose more about the person, saying he would respect the person's implied but unstated wish to keep their identity confidential.
Collins denies she or any of her staff approached Peters, saying he would be "the last person in the world" she would ever want to approach in that manner.
She said other people might have done things she was not aware of.
"No staffer of mine would be in any doubt as to my opinion of Mr Peters and his politics, particularly his racist politics," she told TVNZ.
"I would never want anything to do with Mr Peters in that way."
Peters said Collins' denials would not help.
"I know what happened, I know why it happened ... I'd put my life on it," he told RadioLive.
Key said he did not give any credence to Peters' claim, and attributed it to Peters trying to get himself into the news in the lead-up to the election.
"I don't know how he gets his facts and those things, he might live in a mysterious world that I don't live in, but there's no way he will be factually correct.
"I accept Judith 100 per cent at her word."
He did not agree with Collins that Peters was a "liar", but said he didn't think Peters' story was credible.
"I just know that the concept that that would be happening, in terms of the proposition Mr Peters is making, would be great for a Tui billboard, but not much else.''
He said in general National could potentially work with Peters, but that would depend on the circumstances and deals they had.
"In the end Winston is well known for some of the stories he has. There's been many that you've run where there's been more coming; none's ever arrived and sometimes the facts have been wrong. So I'll leave others to sort of make of it what they want."
A leadership coup would be all but impossible for Collins now, but before the Oravida scandal she was seen as having realistic chances of being a future leader of National.
Peters said he was approached about doing a post-election deal with Collins before the news of Oravida broke.
Collins came under fire over Oravida. She initially failed to disclose a dinner she had in China with officials of the company, which her husband is a director of, and which donated to the National Party. She had been overseas in her ministerial capacity when the dinner occurred.
Key issued Collins with a "final warning" over Oravida, and has more recently described her leaking the name and contact details of a public servant to WhaleOil blogger as "unwise". Collins was one of the central subjects of Nicky Hager's book Dirty Politics.
Peters said it was "terribly hypothetical" whether he would sit in a Cabinet where Collins was also a minister, because he believed Key could not sustain his support for her much longer.
Labour leader David Cunliffe waded into the spat, saying it suggested a split in the National Party.
Cunliffe was reluctant to pick a side, saying he had no proof to go on either way, but "I say this - I don't imagine that [Peters] said what he said for no reason".
"I don't have the information [but] he's never lied to me," Cunliffe said.
He questioned why Key continued to stick with the embattled Collins.
"I guess the question on most New Zealanders' lips and on mine is why is Mrs Collins still a minister and why won't the prime minister do something about it."
Political polls predict Peters will hold the balance of power and be in the kingmaker role on who forms the next government.
He has refused to indicate whether he would prefer a Labour or National-led government, as that would be a "backroom deal", and not based on what New Zealand wanted.
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