The row over Tau Henare and Jack Elder's abuse of the lottery board discretionary fund is the first time that an Internal Affairs Ministers has ignored the advice of the MPs sub-committee.

Labour Internal Affairs spokesperson Trevor Mallard said Mr Elder could not avoid charges of 'favours for mates' and he believed Mr Henare had bullied him into making the large grant in favour of his local Hoani Waititi Kura Kaupapa Maori in West Auckland.

Trevor Mallard said Prime Minister Jenny Shipley should investigate the decision to make the grant, which was much larger than any previously given to a school and given despite the application not meeting the established criteria that schools raise most of the money themselves.

"There is much more to this grant than meets the eye. I am sure the Prime Minister is now aware of series of inappropriate actions by Tau Henare before the grant was made and it is time that she showed some active leadership.

"The only grants for schools' overseas travel have been made when the school has done a large part of fundraising themselves but requires a small top up to help them reach their goal. This is so clearly not the case with this grant that it smells of gross political interference.

"The sub-committee system was set up about ten years ago with an Opposition representative and a Prime Ministerial representative to look over applications to ensure the fund is administered with the utmost integrity. Up until now, most decisions have been made by consensus and the Minister has never overruled the majority of the committee.

"However with one sweep of his pen and bullying from his party's leader, Jack Elder has severely damaged the integrity of this system. The Prime Minister should investigate this matter so the public can once again have faith that lotteries money is used in the best interests of all New Zealanders.

"Jim Bolger got the push because of his inability to deal with Tuku Morgan and Tau Henare. Jenny Shipley is facing the same test now and New Zealanders will be watching her approach with interest," Trevor Mallard said.

© Scoop Media