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Prime Minister Helen Clark could be called to appear before Parliament's privileges committee to discuss what she knew about a $100,000 donation to suspended Foreign Minister Winston Peters by expat billionaire Owen Glenn.
In what would be an extremely rare occurrence, Miss Clark may be asked to answer questions about her conversation with Mr Glenn in February, and her subsequent discussions with Mr Peters in which he assured her there was no such donation.
The potentially extraordinary appearance comes as the ongoing Peters' political donation story again takes centre stage in Parliament.
National is ready to put Miss Clark under pressure over her revelation last Thursday that she was told as long ago as February by Mr Glenn that he had given money to Mr Peters.
She checked the information with Mr Peters at the time but did not say anything publicly about Mr Glenn's differing view until asked directly.
The Prime Minister's statement threatens to engulf her Government in a scandal perilously close to the upcoming election, which must held within 76 days.
It was last night not clear if the privileges committee would ask Miss Clark for more information.
There are 13 members on the committee and a majority would have to back the move.
National leader John Key last night said the committee should call Miss Clark - and that the Prime Minister had a duty to appear.
"Her admission last week that she had been briefed by Owen Glenn means that she can make a valuable contribution to the committee in resolving who is right and who is wrong," Mr Key said.
The privileges committee is grappling with conflicting statements by Mr Peters and Mr Glenn over Mr Peters' knowledge of the $100,000 donation.
Mr Peters is scheduled to reappear on Thursday.
The privileges committee is working against the clock to complete its report and findings before Parliament rises - possibly on Tuesday or Wednesday next week.
Cabinet Minister Trevor Mallard, who was at the private meeting in February at which Mr Glenn told Miss Clark about the donation, says the post of honorary consul-general to Monaco was also raised but there had been no suggestion Mr Owen would get it.
"I've got a vague memory of it being discussed," Mr Mallard said.
"There was certainly no suggestion that it would proceed."
He did not get the impression that Mr Glenn had linked the donation to Mr Peters with the Monaco position.
"Not at all."
What happens now:
• National would need seven votes on the privileges committee to call Prime Minister Helen Clark to answer questions on the Owen Glenn affair.
• It could count on five votes from its own MPs (chairman Simon Power, Gerry Brownlee, Murray McCully and Wayne Mapp) plus Act New Zealand's Heather Roy.
• Labour's four MPs (Michael Cullen, Lianne Dalziel, Paul Swain and Russell Fairbrother) and NZ First's Dail Jones would vote against, which would leave National chasing two of the last three votes.
• Those deciding votes would come from Russell Norman (Greens), Peter Dunne (United Future) and Hone Harawira (Maori Party).