The embattled National MP Todd Barclay may have fallen on his sword, but opposition politicians are adamant the Prime Minister is not off the hook.
After appearing to dig in on Tuesday night, Mr Barclay was effectively turfed out on Wednesday.
The MP for Clutha-Southland released a statement just after 1pm saying he would not contest the electorate in September's general election following this week's revelations about recordings of a staffer in his Gore electorate office.
"I don't want the issues that are important to Clutha-Southland and all of New Zealand to be distracted by an employment dispute," Mr Barclay said.
"This has been a hard decision to make, but it is in the best interests of our government and the National Party ... I will not be making any further comment."
Shortly after, Prime Minister Bill English said Mr Barclay had made the right call.
Mr English said the untrue statements Mr Barclay had made and the incident in general were affecting the MP's credibility and prospects in general.
"It's been a very difficult decision for a young man to make and a shame that it's come to this, but as he said in his statement doesn't want ongoing internal issues to be a distraction either for the government or for the representation of his own community," Mr English said.
Many of Mr Barclay's National Party colleagues said they were sad to see him go.
Finance Minister Steven Joyce however said it had been the only option.
"It's an issue that just doesn't go away for him and that's getting in the way of him being able to do his job and actually the electorate being able to do its job," he said.
"So I think he's realised that's never going to go away so he may as well not stay around."
Labour leader Andrew Little said the matter was a total failure of leadership by Mr English.
He said the prime minister had known for more than a year what Mr Barclay had done but had done nothing until the media found out, and said that amounted to a cover-up.
"A leader would have stepped in, would have seen what the possible consequences were and would have controlled it, managed it and shut it down," Mr Little said.
"And the way he could have dealt with it is when he knew Todd Barclay was saying things that were clearly misleading, clearly wrong, because he knew what the truth was - that's when he should have intervened."
But Mr English said he had alerted the relevant authorities.
"I reported it to the appropriate party official, that's on the record, the electorate chairman," Mr English said.
"I reported it to the police, because there was the allegation of an offence having been committed, so that was passing on the knowledge to the appropriate authorities for them to deal with it as they saw fit.
"So there was element of knowledge of some action that was hidden."
New Zealand First leader Winston Peters said police seemed to have taken a very different approach to the complaint about Mr Barclay than over the 'teapot tapes' when the former Prime Minister John Key complained he'd been the victim of an illegal recording.
"You know, what happened in the Bradley Ambrose case - the level they went to - they were beating down the doors of the media to get to the truth, and when they didn't get to it they nevertheless warned you all," he said.
"So look at the difference in drive, function and ambition of the police on that matter and explain their political decision-making on this matter at the highest level in Wellington."
Police said they would assess the information that has been publicly discussed in recent days to see if it affected their original decision to close the Todd Barclay inquiry.
National Party president Peter Goodfellow did not respond to a question asking if the party was investigating claims a board member contacted Mr Barclay's electorate secretary asking her to withdraw her police complaint. Deputy Prime Minister Paula Bennett said she did not know if National was looking into it.
The National Party board will meet shortly to figure out the process for selecting a new candidate in Clutha-Southland.