Six out of 10 board members resigned today in the wake of Mr Craig's admission of inappropriate conduct regarding his former press secretary, Rachael MacGregor.
Andrew Craig and Regan Monahan confirmed to the New Zealand Herald this afternoon they had resigned, while former deputy leader Christine Rankin, who was also on the board, confirmed earlier in the day that she had left the party.
Mr Monahan, who was the party's Auckland Central candidate, would not comment except to say that his resignation was effectively immediately. "For reasons of future of employment I'm really not in a position to be fronted or speak to the media in any meaningful way," he said.
Andrew Craig also refused to comment further.
Of the three remaining board members, one was overseas and could not comment. Another of them, John Stringer, was facing disciplinary action for revealing confidential information and bringing the party into disrepute.
Mr Craig said today the party still had a future. He said the board was likely to dissolve and a membership vote would be held to choose the next leader and a new board.
Mrs Rankin quit the party this morning, saying she could no longer cope with the allegations around Mr Craig.
Ms MacGregor has accused him of breaking a confidentiality agreement signed with the Human Rights Commission, and is now seeking the right to speak publicly about his conduct.
Mrs Rankin resigned as Conservative chief executive after the general election in September 2014, but remained on the board. She said she would "absolutely not" want to take over leadership of the party now.
"I am very disappointed. I gave my brand to Colin Craig ... I feel very let down,'' she said today. "There are people that would make wonderful leaders of a party like this, but this is a particularly difficult thing to take over from. Who wants to follow this?"
She said she had lost confidence in Craig "a while ago" and challenged him after hearing about his conduct three weeks ago. His position in the party would be discussed by the board and "rapid action" needed to be taken, she said.
"Rachel was his employee and ... this was not an ordinary even a business situation, it was a particular kind of political party where the roles were very strict and very clear. We were doing politics in a different way, but in reality we were not."
Mrs Rankin said the final straw was Mr Craig's "excruciating and embarrassing" news conference on Monday. "This has gone on for months and months and months. Everything that happens, something happens straight after it, and it gets worse and worse and worse."
Mr Craig stood down as leader on Friday, but is considering running again for the leadership or even forming his own party.
Several members of the board do not want him to return, and are seeking to have him kicked out of the party.
Craig keen for 'real story' to be told
Colin Craig says if the confidentiality agreement blanketing his relationship with Ms MacGregor was lifted people would know "the real story".
Mr Craig told Radio New Zealand today his lawyer was in talks with Ms MacGregor's lawyer about lifting the confidentiality agreement, which was currently keeping their relationship details under wraps.
"I realise that some people have been exposed to allegations that I simply haven't seen and haven't been put to me that's disconcerting for them. Everything would be in context and people would know in fact what the real story is [if the agreement was lifted]."
He brushed off questions about the agreement only being lifted because he broke it yesterday during a press conference and said it appeared Ms McGregor had had a "change of heart".
Mr Craig said both parties could "speak freely" to the press and the Conservative Party if it was lifted.
"Her lawyer had indicated to mine that they did not want to go beyond confidence. It appears there has been a change of heart and is there is from her side that would be very appealing to us."
Mr Craig would not be drawn on whether he had "fallen in love" with Ms McGregor - but said he would be able to discuss that if the confidentiality agreement was lifted. He said most of his statements in yesterday's press conference were worded by his lawyers.
"Look, I'm not going to go into the details of the relationship in any way unless confidentiality is lifted," he told RNZ.
"I acknowledge freely there was some inappropriate behaviour and that necessitated me apologising to my wife, who has forgiven me.
"The difficulty here is that because of media speculation we've had to come back and address these issues publicly," he said.
MacGregor 'playing this right way'
Rachel MacGregor is playing her cards well, an employment law expert told Newstalk ZB this morning. And he may have opened himself up to further legal action, employment law specialist Shan Wilson told Newstalk ZB host Mike Hosking.
Mrs Wilson said Mr Craig had arguably already broken part of their confidentiality agreement so Ms MacGregor could put concern about her needing Mr Craig's permission to speak to one side.
"But I think she is playing this the right way. I think she's right in the approach that she's taking because of the fact she received monies under the agreement so the positioning that she's done is clever, so she's keeping herself very clean and protected by saying, 'You consent to me making these statements'."
Mrs Wilson said Mr Craig had also opened himself up to legal action by Ms MacGregor if she had wanted details of the settlement kept secret.
"Because he can open himself up to new actions around breaching confidentiality so for example in the employment arena if you breach confidentiality you can be liable for penalty payment, you can be liable for the damages that flow from breaching that confidentiality. So it's not about the past events anymore it becomes about the current event of breaching confidentiality," she said.
Mr Craig earlier told Hosking that he had warned Ms MacGregor's lawyers that he was going to break the agreement - a move Mrs Wilson found "interesting".
"He said he let them know, he didn't say 'I sought her agreement', 'I obtained her agreement', which is what she's carefully doing back to him and saying the word 'contractor'. So that must be why she took her claim under Human Rights Commission because she wouldn't as a contractor be able to take [her claim] under the Employment Relations Act."
