The National Party is accusing the Prime Minister's Office of a "cover-up" after Chris Hipkins revealed the office working under Jacinda Ardern knew of an email from Stuart Nash disclosing Cabinet matters.
The email, which Newshub has obtained a copy of, shows Nash in 2020 discussing a Cabinet matter to two donors despite the fact that what goes on within Cabinet is meant to be confidential.
Hipkins said on Wednesday the email came up during consultation on an Official Information Act (OIA) request to Nash's office in 2021. It was found to be out of the scope of the request, but the Prime Minister's Office - under Ardern at the time - was consulted.
Neither Ardern or her Chief of Staff were aware of the email, Hipkins said, but it did go through the office.
Asked about a potential cover-up, Hipkins said: "I don't think it was tried to be covered up."
"My understanding is it just wasn't within the scope of the request."
Hipkins said it was one of a number of messages considered as part of the OIA request.
The Prime Minister said he couldn't speak to why it wasn't flagged with Ardern or the Chief of Staff.
"I can't speak to the consideration of it at the time. I was not the Prime Minister at the time. I have certainly made it very clear that I expect to be alerted to the existence of any such communications in the future."
But National leader Christopher Luxon said the revelation that someone in the Prime Minister's Office knew about the email "is damning".
"Mr Hipkins said that neither he nor his predecessor Jacinda Ardern, or their respective Chiefs of Staff knew of the existence of the emails until yesterday," Luxon said in a statement.
"That may be because their staff deliberately chose not to tell them, allowing the Prime Ministers the opportunity for 'plausible deniability'."
He called it a "serious and shocking revelation".
Later at a press conference, Luxon questioned "what kind of culture" there is in the Prime Minister's Office "if you don't actually flag those issues up the chain".
"We're talking about not a light issue here," he said.
"We are talking about a very serious issue where a senior Cabinet minister, an experienced Cabinet minister, doesn't understand or hasn't internalised the Cabinet Manual sufficiently and either thinks they can get away with it under Chris Hipkins' leadership or Jacinda Ardern's, and it sits in an office for two years being covered up."
Hipkins on Wednesday also ordered a review into all of Nash's communications with donors.
The review will look at "whether there have been any other breaches of Cabinet collective responsibility or confidentiality, or whether there have been any perceived or actual conflicts of interest between Stuart Nash and those donors". It's expected to take two months.
"Stuart Nash has assured me he will fully cooperate and I expect to have an outcome in the coming months, prior to the general election," Hipkins said.
"In recent weeks I had been given assurances from Stuart Nash that there were no other instances or allegations of misconduct that would be outside of Cabinet rules. Given yesterday’s revelation, I feel it is important to verify this."
Nash on Wednesday afternoon apologised for "causing an unwanted distraction". He said he would remain Napier's local MP "for now", but didn't commit to standing at the election.
"To the people of Napier, whom it has been an absolute pleasure and privilege serving and representing in parliament, I also offer my apologies," he said.
"For now, I will continue to be your local MP and will work hard to ensure you get everything you need and deserve in your journey of recovery after Cyclone Gabrielle."
National has been calling for Nash to stand down immediately. That would spark a by-election. Luxon questioned how Nash can be trusted in the Labour caucus after leaking Cabinet details.
If Nash was to retire later in April, a by-election doesn't have to be held due to the proximity to the general election - but 75 percent of Parliament would have to agree.