A contrite Labour Party president Mike Williams says he offered to quit to help stem the fallout from the Owen Glenn loan furore.
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But as the affair continues to embarrass the Government, Prime Minister Helen Clark last night avoided a public display of contact with the billionaire Labour Party donor, including not taking part in a hongi that would have had her and Mr Glenn face-to-face.
Labour Cabinet minister Judith Tizard yesterday told The Dominion Post that Miss Clark and other female MPs at the Auckland University function were following Ngati Whatua custom, saying that it was "Ngati Whatua rules that women don't hongi".
But Ngati Whatua Orakei Maori Trust Board chairman Grant Hawke said there was no such custom. "We all hongi."
Mr Hawke said it was Miss Clark's right "not to come over and hongi", and there had been a request by the university to limit the number of those hongi-ing to people in the front row, because of time pressure. Male members of the front row, including Miss Clark's husband Peter Davis and Cabinet minister Trevor Mallard, did hongi other guests on the stage, including Mr Glenn.
Last night's function, celebrating Mr Glenn's $7.5 million donation to the university, coincides with continuing fallout over revelations in The Dominion Post last week about his dealings with the Labour Party.
Mr Williams confirmed yesterday that he offered his resignation to Miss Clark, but she advised him not to because he had done nothing wrong.
Mr Williams has admitted erring over his claim that Mr Glenn had not donated money to Labour since the 2005 campaign, after Opposition claims that Mr Glenn's New Year honour was payback for being Labour's biggest donor.
Mr Williams said yesterday it was an honest mistake. "I don't classify a loan as a donation. I was mistaken.
"There was an element of donation in the interest-free. I should have thought of that."
He had offered to step down because he was upset "about this becoming the message".
Deputy Prime Minister Michael Cullen said Miss Clark had told Mr Williams to "not be so silly".
"He had absolutely nothing to resign over, he made an honest error. There is no smoking gun, there is no gun," Dr Cullen said.
Miss Clark yesterday defended Mr Williams as a man of integrity.
"He's been distressed that he made an honest mistake and he's been distressed about how the issue has unfolded."
- The Dominion Post