The Act New Zealand Party's problems are likely to turn people off MMP, Prime Minister John Key says.
There will be a referendum on MMP at the same time as the next election, when voters will be asked whether they want to change to another electoral system.
Mr Key was asked at his post-cabinet press conference today whether he thought "the Act debacle" would affect voter attitudes.
"I think it will increase the likelihood that people will vote MMP out," he said.
"I'm wondering whether the public might say `look, very small parties are consuming quite a lot of time' and maybe they will take the view that MMP fundamentally isn't working so well."
Mr Key said he had no scientific evidence for what he was saying, and he was expressing a personal opinion.
"I'm not saying they should or shouldn't take that view," he said.
"All the polls I've seen so far have been about 50-50 for retaining it or voting it out, and if you did that poll this week that might slightly change it."
Act has been thrown into chaos by the resignation of disgraced MP David Garrett, and party leader Rodney Hide's judgment is being questioned.
Mr Key today reiterated his opinion that Mr Garrett should quit Parliament altogether.
"I don't think he has a mandate to stay on," he said.
"He has resigned from Act so it's hard to argue he has a mandate and it's impossible to believe he would be returned as an independent."
Mr Garrett resigned after telling Parliament last week he used a dead baby's identity to obtain a false passport 26 years ago, which Mr Hide knew about before Mr Garrett became an MP in 2008.
He was prosecuted for that offence in 2005, and was discharged without conviction.
Mr Key said Act clearly had some internal problems to resolve, but he didn't want to predict what damage the party could ultimately suffer.
"They've been at quite low levels anyway, polling around 2%, it will cause some damage in the short term but in the long term we have to wait and see."
Mr Key again said he had confidence in Mr Hide as a minister and Act's problems were not affecting that.
"My responsibility is to judge him in his capacity as a minister, and in that capacity he hasn't let me down," he said.
"He is the leader of the Act Party and he is a minister of the Crown -- they are quite separate roles."
Mr Key said in terms of Act's problems the only "technical case" that could arise would be if Sir Roger Douglas was elected leader.
"I've made it clear I don't want him as a minister in my cabinet," he said.
