Pressure is mounting on New Zealand First and its leader Winston Peters after police confirmed on Monday that they will investigate claims the political party falsely declared a nil-donation return for 2007.
ACT party leader Rodney Hide laid the complaint last week alleging that the nil-return was false, after the Spencer Trust confirmed it made a payment to New Zealand First in 2007 of more than $10,000.
It is understood about $80,000 was paid to the party's main bank account by the trust in December 2007.
All donations to political parties in excess of $10,000 must be declared, but New Zealand First has never declared any money from the Spencer Trust.
Police say they will take up the complaint, but have refused to comment further on the investigation.
Mr Hide says it should be an open-and-shut case for police looking into New Zealand First's electoral returns.
Mr Peters last week dismissed Mr Hide's complaint as "obsessive, compulsive grandstanding" and was a complete waste of time.
The party's secretary would be the person held responsible if police decide to prosecute.
Electoral Commission demands returns
The Electoral Commission announced on Monday that it is requiring New Zealand First to produce its promised amended party donations for 2005, 2006 and 2007 by the end of September.
It also wants the party's accompanying auditor's reports and a more detailed explanation as to why amended returns now have to be filed.
The commission received a complaint last week about New Zealand First's return of donations for 2007.
It says that, if necessary, it could refer the matter to police for investigation. Any prosecution would have to commence before mid-November.
Two separate investigations are already under way into other donations made to New Zealand First.
The Serious Fraud Office is investigating a transfer of $50,000 from the Spencer Trust to the party in September 2005.
The transfer included a $25,000 donation from businessman Sir Robert Jones, which was not declared in the party's electoral returns, and other donations by the Vela family.
Mr Peters has stood down from his ministerial duties, including that of foreign affairs minister while the Serious Fraud Office inquiry is carried out.
Parliament's privileges committee is also considering whether Mr Peters should have declared a $100,000 donation from expatriate businessman Owen Glenn towards the cost of an electoral petition in Tauranga after the 2005 election.
Mr Peters claimed that National Party MP Bob Clarkson had overspent on his successful campaign.