Prime Minister John Key says John Banks made the right decision to resign as a minister after today being ordered to stand trial for alleged electoral fraud.
The charges relate to donations from internet millionaire Kim Dotcom and SkyCity Casino towards Mr Banks' Auckland mayoral campaign against Len Brown in 2010.
Today's legal decision was the final straw, the Prime Minister accepting Mr Banks' resignation as a minister.
"He could have argued that he was going to guts it out because he claims strongly that he's innocent," Mr Key told reporters.
"But realistically for a minister to be in the Government and defending potentially a fraud charge, I think, you know, he made the right decision to offer his resignation."
Smile turns to dismay
Just a few hours earlier, Mr Banks was sporting a smile and a spring in his step as he arrived at the Auckland District Court.
"Make sure you're here when I come out," he told reporters.
But the news from Judge JP Gittos wasn't what he was hoping for.
"I am satisfied that sufficient evidence has been presented to commit the defendant for trial and he will be committed for trial accordingly," Judge Gittos said.
Mr Banks' lawyer entered a not guilty plea on his behalf.
Allegations of electoral wrongdoing have dogged the Act Party leader for the past 18 months.
Mr Banks says he believes the judge's decision was wrong.
"We thought we would get the matter put away today and put to bed and put behind us. But we haven't," Mr Banks said outside court.
John Banks may well be wishing he had never met Kim Dotcom, a man he was once seemingly close to, and who donated $50,000 to Mr Banks' failed 2010 mayoral campaign.
It is alleged Mr Dotcom's donation and a $15,000 one from SkyCity were recorded on Mr Banks' electoral return as anonymous when in fact he knew who they were from - an offence under the Local Electoral Act.
But he remains defiant.
"I am relaxed. From day one I told you I have nothing to fear and I have nothing to hide," he told reporters.
'Mr Banks was aware of the source'
Last year, the police decided not to prosecute Mr Banks over the allegations, due to insufficient evidence.
But in a private prosecution brought about by retired accountant Graham McCready, evidence from Kim Dotcom and a SkyCity boss convinced the judge there was a case to answer.
"This evidence clearly shows that Mr Banks was aware of the source of both donations and must therefore have known that they could not properly have been characterised as coming from anonymous sources," Judge Gittos said.
The nub of the case will be is proving John Banks knowingly filled in a false return. The onus is on the candidate to make sure the form is correct. But Mr Banks' lawyers will strongly argue that even if the report was false, which they dispute, Mr Banks had no knowledge of that.
Many in Mr Banks' electorate of Epsom say they are disappointed with their local MP.
"If he's found guilty then he shouldn't be in a position of power," one man on an Epsom street told ONE News.
A woman said: I think the local people will be very disappointed.
Another said: Everybody has an achilles heel don't they."
For his part, Mr Banks is confident his lawyers can prevent the matter going to trial.
'A shabby look'
With John Banks' departure, John Key has now lost two ministers from his vital one-man support parties, Act and United Future.
Asked what sort of danger does this pose for the Government, ONE News political editor Corin Dann said it is "certainly a shabby look" for the Government to lose those two key ministers.
"But essentially those votes will stay with the Government. So they maintain that 61 majority to be able to pass whatever legislation they want," Dann added.
He said even if John Banks was potentially forced out of Parliament - and that is possible if he was found guilty in this case - National would still be able to rely on the Maori Party for supply and confidence.
"So they would be able to continue to govern, and John Key today stressing there's no danger of him calling a snap election or anything like that."
Dann said "where it gets a little more complicated" is with contentious legislation such as the SkyCity Bill which sets up the convention centre.
The Greens say there's a conflict of interest there because John Banks essentially has the deciding vote on that bill going through, Dann reported.
"He's in a trial now, if you like, which also involves the CEO of SkyCity giving evidence. So certainly that's pretty tricky. But John Key says [there's] no conflict of interest as far as he's concerned and expects to pass that bill through the House by the end of the year."
Key had refused to read police report at the time of allegations against Mr Banks so perhaps has "a little bit of egg on his face now that this has gone to a trial," Dann said.
But he said Mr Key is taking Mr Banks at his word that he did nothing illegal and is "standing by his man if you like."
Mr Banks had been a minister outside cabinet with the portfolios of small business, regulatory reform, associate education and associate commerce.
Mr Key has said he will be reallocating Mr Banks' portfolios to existing Ministers and will announce this in the next few days.
The case is due to return to court on December 17.