National Party Leader John Key says Winston Peters would be unacceptable as a Minister in a government led by him unless Mr Peters can provide a credible explanation on the Owen Glenn saga.

"Labour Party donor Owen Glenn's letter to the Privileges Committee completely contradicts Winston Peters' version of events about the substantial $100,000 donation made by Mr Glenn to Mr Peters' legal costs.

"Mr Glenn's letter represents a direct challenge to Mr Peters' credibility, from the only other person in the world in a position to know the facts.

"From Parliament's point of view, the Privileges Committee provides an appropriate vehicle to resolve the points of conflict and to hold individuals to account.  But from the Prime Minister's and the Government's point of view, that is not enough.

"Governments and Ministers must enjoy the confidence of the Parliament and, ultimately, the public.  Faced with today's revelations, it is no longer acceptable for Mr Peters to offer bluster and insults where simple, courteous, honest answers are required.

"It is no longer acceptable or credible for Helen Clark to assert a facade of confidence in her Foreign Affairs Minister and to fail to ask the plain questions of him that she has a duty to the public to ask.

"Faced with today's revelations, Helen Clark must stand Mr Peters down as a Minister.  That is what I would do if I were Prime Minister.  Helen Clark has stood Ministers from Labour down for much less.

"Unless he can provide a credible explanation about this serious issue, he should be unacceptable to Helen Clark as a Minister in her Labour-led Government.

"Mr Peters will be unacceptable as a Minister in a government led by me unless he can provide a credible explanation."