The ACt Party is looking for a new leader, after John Banks' announcement that he will quit politics at the 2014 general election.
In a decision released on Tuesday, Justice Heath ruled that Mr Banks should stand trial for making a false electoral return relating to his failed bid for the Auckland mayoralty in 2010.
John Banks announcing he will stand down as ACT leader. Photo: RNZ
The judge upheld an earlier ruling made in the District Court. Mr Banks is accused of listing donations from casino operator SkyCity and internet businessman Kim Dotcom as anonymous, while in fact knowing who had made them.
John Banks fought back tears as he made the announcement in Parliament on Wednesday, saying he is committed to clearing his name and won't be able to do his best for ACT while fighting a court battle.
He will step down as leader at the party's annual meeting in March and will not seek re-election as the MP for Epsom. He said anyone who knows him knows that he would never file a false return knowingly.
"I'm not fearful of the process or where it will end. I'm simply not able to dedicate all my energy and ability on returning ACT to Parliament next year while fighting to clear my name."
Mr Banks said he is committed to serving the people of Epsom until the election.
Prime Minister John Key told reporters on Wednesday that he feels sorry for Mr Banks.
"This is a form he filled out in 2010. I'm not going to go through the merits of that because it's before the courts. But he has had a long and distinguished career, in my view, in both local and central government and I believe him to be a thoroughly honest guy."
Mr Key said everyone in New Zealand has the right to be innocent until they are proven guilty, but no-one is above the law.
Labour Party leader David Cunliffe said John Banks is in trouble and should resign fully from Parliament.
"Because he's said that he cannot continue to do his duties as a leader of his party because of the press of work beyond March, I think that's true now. And secondly, because it's not appropriate for the Government's majority to be propped up by somebody who is on electoral fraud charges."
Mr Cunliffe said Mr Banks' actions over the past few years have been a disgrace.
ACT Party president John Boscawen said a candidate and leader will named in the next few months. Nominations for the Epsom candidacy would open soon and the successful candidate should be decided by 1 March.
Judge recommends trial early in 2014
Justice Heath recommended that the trial be given priority, saying it could have an impact on the general election and indicated it could take place in the High Court as early as the first quarter of 2014.
The prosecution was originally brought by Graham McCready from Wellington in a private prosecution.
Mr McCready said the case was not about personalities or politics, but principles, including proving that ordinary people have access to the court system and that the judiciary is independent.
Because he proved these are the case, Mr McCready said he is not too concerned about the outcome of John Banks' trial.
