Act leader Rodney Hide has denied giving a confidential defence report to a member of the party's board but in Parliament today a Labour MP claimed he did and said the Security Intelligence Service (SIS) was involved.
Board member Nick Kearney told NZPA he had never seen the document, understood to be a draft prepared for a cabinet paper.
The report is at the centre of a stoush within the Act Party which has seen Heather Roy stripped of the deputy leadership and her ministerial portfolios, which included the role of associate defence minister.
Mr Hide denied handing a copy of the report to Mr Kearney.
He said he wanted to see the report but Mrs Roy didn't want him to take it out of her office. When he did take it out of her office, she complained to Ministerial Services.
In Parliament, Labour MP Trevor Mallard said Mr Hide gave the report to Mr Kearney, possibly through a staff member.
"Nick Kearney, who until last night was a member of the Act board, has now resigned from the Act board because he has been caught trying to give New Zealand defence assessment papers to a blogger," he said.
"I want to know why Rodney Hide took those papers and why did he give them to Nick Kearney."
Mr Mallard said Mr Kearney was caught out because the blogger he tried to give the papers to was a former military person who "had integrity and said 'this is inappropriate."
"Apparently now the SIS is involved," he said.
Mr Hide said Mr Kearney had been upset by allegations that he had a copy of the report and had offered to resign.
He said he told Mr Kearney not to resign because he had not done anything wrong.
Mr Kearney told NZPA he was not given a copy of the report, had never seen it and did not know what it contained.
The allegation he was given the report was made by a fellow board member who was a supporter of Mrs Roy, he said.
The allegation was made during a confidential board meeting discussion, he said.
"It staggered me, it was jaw-dropping, and I said 'I have no idea what you're talking about'," Mr Kearney said.
There was a battle between Mr Hide and Mrs Roy and he was an innocent third party, Mr Kearney said.
"I'm a nobody, I'm a volunteer, who does this in his own time ... and this is the way I get treated."
Mr Key said his office had been advised by Ministerial Services that there was no substance to the complaint against Mr Hide.