The Prime Minister has said calls for him to sack ACT Party leader John Banks is politicking by the opposition.
Labour said Banks should be sacked after police documents released by the party revealed that ten wealthy donors, including internet tycoon Kim Dotcom, were targeted by Banks' campaign team for $25,000 each.
The documents come from a police inquiry this year over anonymous donations to Banks' unsuccessful Auckland mayoral campaign in 2010.
Banks refused to talk to ONE News today, avoiding Deputy Political Editor Jessica Mutch at his electorate office in Auckland.
But Key told TV ONE's Breakfast that he would not fire Banks in the wake of the new information, saying he trusts him.
"He's got a version of events, others have got a different version. It's not for me to forensically go through that," he said.
"But I accept if he says to me, which he has, 'look I didn't know' then I accept that. Look there is not court case against the guy."
However, Labour Leader David Shearer said it is "completely negligent" for Key not to read the police report on one of his own ministers.
"John Key is using this as political cover, he knows if he reads the report it will be clear to him that John Banks has lied to him and he would have to sack him."
He challenged Key to summon Banks to his office and question him face-to-face about the donations.
"John Key promised higher ethical standards as a Prime Minister," said Shearer.
"It's time he listened to his own advice and sacked Mr Banks."
Labour's deputy leader Grant Robertson told TV ONE's Breakfast last week that if police cannot charge Banks over the donations, Key must get rid of him.
Speaking in May, Banks told ONE News he "didnt' know" about that it was Dotcom who had made the donations.
This goes against the police documents, which show Dotcom, in a sworn statement, said he offered Banks $50,000 for his mayoral campaign during a June 2010 meeting at his Coastesville mansion.
Banks then requested the donation be split in two so he "would not have to declare where it came from".
Dotcom says Banks then said: "I want to help you Kim, and I can help you more effectively if no one knows about this donation."
On Twitter today, Dotcom posted: "Notice how @JohnKeyPM is spin doctoring Bank's donation deception? Willful blindness to protect a liar and a majority."
He followed it by a second post saying: "I propose to take part in a #3wayQandA with John Banks and @JohnKeyPM about the donation scandal. Time for facts."
Along with the Maori Party and United Future, Key relies on Banks' vote for a majority in Parliament.
But the Prime Minister denies this is about numbers.
MPs are set to go head-to-head in the debating chamber tomorrow on the issue.