Winston Peters and his lawyer Brian Henry have been changing their stories to suit the facts, ACT leader Rodney Hide told Parliament's privileges committee during a hearing into a donation from the businessman Owen Glenn.
The committee held further hearings on Tuesday into the $100,000 donation towards Mr Peters' legal bills and whether he should have declared it.
Earlier on Tuesday before the committee, Mr Henry altered key parts of his story, but still insisted the New Zealand First leader knew nothing about the donation until July.
Mr Hide says the story from Mr Peters and Mr Henry has changed as the facts have emerged, which makes their evidence all the more difficult to believe.
National leader John Key says Mr Henry has failed to defend with any credibility his version of events.
Mr Key says it came as no surprise to him that Mr Henry was unable to mount a credible defence to evidence presented by Mr Glenn last week that Mr Peters was aware of the donation as early as 2005.
Mr Henry reappeared before Parliament's privileges committee via video link from Australia on Tuesday morning.
Mr Henry told the committee that, to his memory, he had one phone conversation with Mr Glenn during which he asked for the donation in either late November or early December 2005.
Mr Glenn last week told the committee that it was Mr Peters who asked him for the donation in 2005, not his lawyer.
The Monaco-based businessman produced phone records showing that he spoke to Mr Peters in December 2005, minutes before Mr Henry forwarded an email regarding his bank account details.
Mr Henry told the committee on Tuesday that email would have been to jog Mr Glenn's memory about making the donation.
Mr Henry says he also received a call from Mr Peters that day and says the MP must have mentioned Mr Glenn's name.
"That would have triggered with me the memory to follow up on his promise to make a donation. The email, in my belief, is a prompt to him about a possible donation," he told the committee.
Mr Henry says he cannot remember the phone call with Mr Peters, just before sending the email, but claims he would have remembered it if the donation had been discussed.
"If Winston Peters had told me that Owen Glenn had agreed to the donation, then there would have been a recorded comment by me to that effect in the email.
"There would also have been an altercation between myself and Mr Peters that I would have remembered, because that is not the way we work."
Mr Henry told the committee it is his practice not to reveal the identity of donors to politicians he is representing.
PM unwilling to sack Peters
Mr Peters has been stood down as foreign affairs minister while three separate investigations continue into donations to New Zealand First, but remains on a ministerial salary.
Prime Minister Helen Clark says there would have to be a devastating development for her to sack Mr Peters.
A One News poll on Monday night found 78% of respondents did not believe that Mr Peters has been open and honest about the funding his party has received. In addition, 58% believed Miss Clark has been too soft on Mr Peters, but she rejects that.
"Perhaps it tells you that I've been managing it in a way which is based on principle, which is that a man is going through a process. He's been stood aside from his job as happens in many employment situations of this kind, and we await the outcome."
Miss Clark says she does not believe the matter is damaging support for the Labour Party, describing it as a sideshow.
However, she reiterated her thoughts about how Mr Peters has handled the controversy. "His belligerent attitude has probably meant he's dug deeper holes that he needed dug, but he has to judge for himself what's appropriate."
In an interview on Maori TV on Monday night, Mr Peters said Miss Clark's criticism of his attitude was in part a fair comment.
However, he says he expects to return to Parliament after the election on 8 November, saying he is confident his name will be cleared.
