Labour list MP Shane Jones has been stood down while the Auditor-General investigates his role in the Bill Liu passport case.
Leader David Shearer called in Lyn Provost this afternoon as pressure mounted on Jones to explain why he granted Liu citizenship in 2008, over-ruling the advice of officials.
Liu - also known as Yong Ming Yan - is on trial for passport fraud and a verdict will be delivered tomorrow.
Shearer said he believed Jones followed the proper process and was left in an "impossible position".
He said Jones had "encouraged" him to call in the watchdog.
"But given the differing statements made in and outside of court and the questions that have been raised publicly, I believe that an independent agency should review the case.
"I've asked for the Auditor-General to look into all the departmental as well as ministerial processes involved in this case.
"Shane has encouraged me to take this action because he has been left in the impossible position of not being able to clear his name. An inquiry will enable him to do so."
While the inquiry is underway, Jones will stand down from the front bench. He holds the shadow portfolios regional development, Maori economic development and fisheries.
Shearer has come under fire for not acting sooner - especially given his tough stance on government ministers John Banks and Nick Smith who were facing a scandal.
"I stand by my decision not to stand Shane down earlier because I believe that everyone has the right to natural justice and to be given the opportunity to answer questions," Shearer said.
"New Zealanders must be able to have confidence in the processes of government and that is why Labour believes it is important for the Auditor-General to provide reassurance that the appropriate action was taken in this case."
A spokeswoman for the Auditor-General's office confirmed they received the request from Shearer.
A request does not automatically trigger an investigation.
CAREER ON A KNIFE-EDGE
The political future of Jones, who has often been tipped to be a future Labour Party leader, is again on a knife-edge.
His career has been formed by ups and downs in Parliament, and he has taken another plunge.
The MP has been unable to shake off his nickname of Minister of Pornography after he was demoted for charging hotel porn to his taxpayer funded credit card in 2010.
Jones watched blue movies up to 19 times, sometimes two at a time while on ministerial business.
From the Far North, Jones was brought up by his grandparents and whether in school or out, he surged into top positions very quickly.
He headed the early start-up of the Ministry of Environment, proceeded to a masters qualification at Harvard University and returned to take up a directorship role with the Maori Fisheries Commission.
He entered Parliament as the Labour Party attack weapon on the Maori Party in 2005, and as a person who had huge cross-over appeal into non-Maori communities.
In 2007, he was promoted to Cabinet as the Minister of Building and Construction. He was also made associate minister in charge of Treaty of Waitangi negotiations and Immigration and Trade.
Jones' name has often been dropped for the Labour leadership, but it seems he can't stay away from trouble.
- The Dominion Post