Auditor-General Lyn Provost has confirmed she will investigate Labour MP Shane Jones over an immigration decision he made during the last Labour government.

Ten days ago Labour leader David Shearer referred the issue, which is about the decisions by then-associate immigration minister Mr Jones to grant citizenship status to Chinese businessman Bill Liu - also known as Yong Ming Yan - to the office of the auditor-general.

The approval by Mr Jones flew in the face of official advice, and Mr Shearer’s referral was a change in stance as he had previously maintained that at least a quarter of the approvals of citizenship were against official advice.

That fact that in this case questions of whether Mr Lui met the “good character “ test appears to be a significant issue.

The terms of the inquiry are relatively broad and cover the policies and practices of the Department of Internal Affairs when advising the Minister on applications for citizenship – in particular where the “good character” of the applicant is an issue.

They also cover how and why the minister made the decision he did, and “any other matters the Auditor-General considers it desirable to report on.”

Francis Cooke, QC, is to lead the inquiry.