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Mr Barclay denied recording the conversations of his former electorate agent Glenys Dickson, whose complaint to police sparked a 10-month investigation.
In a sensational development, Prime Minister Bill English yesterday confirmed he had provided a statement to police and told them Mr Barclay had told him he left a dictaphone running in his electorate office and had recordings of his staff.
At the time, Mr Barclay told the Herald: "I had received complaints about the conduct of a staff member from members of the public and I referred the matter to Parliamentary Services. As the legal employer of support staff, they acted as they deemed appropriate and embarked on a disciplinary process. It is an employment matter and as I've said in the past I can't go into details through the media."
After reading that, Mrs Dickson followed up with Parliamentary Services. In a letter seen by Newsroom, the service's general manager David Stevenson said no complaints existed against Mrs Dickson.
"Parliamentary Service has neither received any complaint about you nor has it carried out any employment investigation or taken any disciplinary action against you."
Mrs Dickson told Newsroom the Clutha-Southland MP's statements were misleading, dishonest and defamatory.
Parliamentary Service has refused to comment on the Barclay allegations, saying it is an employment matter.
The Herald has approached Mr Barclay for comment.
He is under building pressure to step down after yesterday's bombshell admission by Mr English showed the MP had misled the public - but he appears to be digging in.
The Clutha-Southland MP read a short statement to media last night in which he confirmed Mr English's statement to police was correct, and apologised for making "misleading" statements earlier in the day.
Flanked by National whip Jami-Lee Ross and Invercargill MP Sarah Dowie, Mr Barclay walked away before answering questions.
In a further development last night, Newstalk ZB reported that the recordings may have been made by CCTV rather than a dictaphone. A private security firm was alleged to have put cameras into Mr Barclay's office, at his request, to observe a staff member.
This morning the Politik website reported party officials as confirming former Minister Kate Wilkinson had been charged with investigating allegations of improper votes and "delegate stacking" involving Mr Barclay's family and supporters. If evidence was found, a formal inquiry could be launched.
Members of the electorate opposed to Mr Barclay have called for police to re-open the investigation against him, now Mr Barclay says he "accepts" Mr English's statement about the recordings.
Labour leader Andrew Little said Mr English's leadership had been found lacking and he must now compel Mr Barclay to front up to police.
NZ First leader Winston Peters said: "There has been a cover-up all the way to the Prime Minister's office."
Former electorate chairman Stuart Davie contacted Mr English last year, asking him about claims Mr Barclay had made secret recordings of Ms Dickson, during an ongoing employment dispute.
Mrs Dickson had previously worked for Mr English, who held Mr Barclay’s Clutha-Southland seat for 18 years before becoming a list MP.
Mr English’s February 21 text to Mr Davie read: ‘‘He left a dicta-phone running that picked up all conversations in the office. Just the office end of phone conversations. The settlement was larger than normal because of the privacy breach.’’
The settlement was paid from then prime minister John Key’s leader’s fund, which is taxpayer money.
It is illegal to intentionally intercept by means of an interception device private communications you are not party to.
The secret recording allegation led to division within the previously united Clutha-Southland National Party.
It led to Mr Barclay facing — and surviving — a selection challenge from Simon Flood, a former Merrill Lynch banker.
Mr Flood told the Otago Daily Times yesterday he wanted to ‘‘stay on the sidelines’’ for now.
‘‘I think it is better for me to say nothing at this stage and let the process take its course.’’
Clutha Southland residents spoken to by the Otago Daily Times last night believed Mr Barclay should resign.
New Zealand First Clutha-Southland candidate Mark Patterson, a sheep and beef farmer in Lawrence, said Mr Barclay's position as a National MP was ''untenable''.
Mr Barclay would have to resign or be replaced, because the National Party had ''too many good people with high integrity who will be horrified by what they've seen'', Mr Patterson said.
A former local body politician, who did not want to be named, wanted Mr Barclay to resign.
''It would be the decent thing to do because nobody can trust him now. He hasn't shown himself in a very good light ... You've got to be above reproach.''
- additional reporting ODT