A decision to give UnitedFuture time to get its affairs in order has sparked a walkout by MPs and seen Speaker David Carter accused of protecting an ally.
Last week UnitedFuture, whose sole MP is Peter Dunne, asked the Electoral Commission to cancel its party registration because of uncertainties around its members' addresses and its financial status.
Opponents called on the Speaker to immediately cease to recognise UnitedFuture as a party in Parliament.
That would see Dunne classed as an independent MP, and he would lose several privileges, including $100,000 a year of parliamentary funding and a front-row seat in the debating chamber.
But Carter said he had accepted assurances from Dunne that he would file an application for registration next week.
Carter said he would revisit the matter in about six weeks when the Electoral Commission had completed its checks. UnitedFuture would continue to be recognised, he said.
The decision prompted Labour MP Trevor Mallard to label the House "a farce", shortly before leaving rather than apologise.
Outside Parliament, Mallard said Carter had chosen to protect Dunne because UnitedFuture supported the Government.
"That, in most countries, would be regarded as corruption."
Mallard immediately wrote to Auditor-General Lyn Provost, urging her to take action to ensure Dunne's funding ceased, or risk Parliament being in breach of the Public Finance Act.
NZ First leader Winston Peters demanded to see the advice Carter had used in reaching his decision and when this was refused, led a walkout of his party.
It was "a shabby day for democracy in New Zealand", Peters said.
"You've got someone who does not qualify for hundreds of thousands of dollars of taxpayers' funds. The rest of us in the past have been punished in a way that's been legal. But the Speaker will not give us his so-called legal opinion or the basis that he made this decision. We won't wear that sort of decision-making in this Parliament."
Later, State Services Minister Jonathan Coleman was ordered to leave by Carter after he refused to apologise for calling another MP a "coward".
Coleman was philosophical. "I don't think today probably reflects that well on Parliament in general, but look, you know, it's a robust environment".
- The Dominion Post
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