Prime Minister John Key says it is up to the Auckland Council to decide how the Mayor is dealt with, after a review found he had breached the council's code of conduct.
A report by auditors Ernst & Young found that no inappropriate council spending related directly to Mayor Len Brown's two-year affair with Bevan Chuang other than a large number of calls and texts on Mr Brown's council mobile phone.
However it found that he had accepted nine complimentary rooms and 64 upgrades, including three free rooms at SkyCity - none of which were declared as gifts as required.
Mr Brown says he forgot to officially declare the hotel rooms in his busy first term in office. He says he won't resign following the review into his conduct, and believes Aucklanders want him to continue working on major issues for the city.
There are no specified penalties for breaching the code but Mr Brown could face censure motions from councillors.
John Key says Mr Brown's behaviour is an employment matter for the Auckland councillors to deal with.
The Prime Minister says he'll continue to work with Mr Brown in his mayoral role.
Code of conduct under scrutiny
Councillor George Wood wants the code looked at, and matters like acting with integrity and the register of interests discussed, at a formal council meeting. The last meeting of this year takes place on Thursday.
Meanwhile, Mr Brown is questioning the valuation of $39,000 put on free hotel rooms he failed to declare.
Material supplied by the mayor's office says there is no agreed way of valuing upgrades, suggesting the auditors are using full retail tariffs, rather than the reduced prices hotels charge.
Mr Brown says he was mistaken in previously insisting he had never accepted free rooms, and overlooked the gifts during a busy three years.
An Auckland councillor has called for the Mayor to reveal who made large donations to his electoral campaign before new transparency laws came into force requiring all donors giving more than $1500 to be named.
Of the funding collected for this year's campaign, 80% came in before the law changed.
Mr Brown lists 10 donors who gave more than $1500, and whose total contribution reached nearly $70,000.
Councillor Sharon Stewart says people want Mr Brown to reveal who they are and it is important their names are out in the open.
A spokesperson from Mr Brown's campaign says some people who gave wanted to be anonymous, and the mayor had to operate under the law at the time.