Bill English

Wellington, Sept 28 NZPA - Acting Prime Minister Bill English has moved to try and end the controversy swirling around his ministerial housing allowances by paying it all back and saying he will take none in the future.

Mr English believed he had broken no rules but the move was an acknowledgment the ongoing questions over whether he was eligible were damaging his credibility and distracting the Government.

"As the minister of finance it is unacceptable to have any doubt about it," Mr English said.

A TV One poll showed that voters felt the issue was denting Mr English's credibility.

Asked if the issue had damaged his credibility, 62 percent said yes and 27 percent no; asked if Mr English has acted with integrity, 54 percent said no and 30 percent yes.

Mr English has been embroiled in a row over housing allowances after it was revealed he was claiming a much higher allowance for living in the same house as a minister than he lived in as an Opposition MP.

Despite paying pack the $12,000 difference, others have questioned why he was receiving any housing allowance as his family has been resident in Wellington for many years.

Mr English's family home is in Dipton, Southland where has been an electorate MP since 1990.

More questions have been raised over why he declared no pecuniary interest in his family home while applying for the allowance.

To try and put an end to the doubts, Mr English announced today:

* he would not be taking up any housing allowance;

* that he had not received any housing allowance since the story hit the headlines in late July;

* all housing allowance money received since becoming a minister had been returned today ($32,000); and

* he had a legal opinion from Stephen Kos QC that changes to his family trust arrangements did not affect his eligibility for the allowance.

Mr English said he had told Prime Minister John Key about his decisions over the weekend and Mr Key said he fully supported him as the "issue had become an unfortunate distraction".

Mr English did not believe he was setting a precedent for others as his circumstances were unique and Parliament needed to have better rules about how it accommodates the families of long term politicians.

"At all times my decisions have been driven by my desire to keep my family together and provide them with as much stability as possible. It's now clear that the system has struggled with to deal with my circumstances," he said.

"Managing my family and managing the economy are a much higher priority to me than the housing allowance.

The Auditor-General's office was due to have an informal meeting with Mr English tonight as it considers whether to hold a formal inquiry into the allowance.

Progressive Party leader Jim Anderton has written to Auditor-General Lyn Provost asking for an inquiry into whether Mr English meets the criteria for being an out-of-town MP.

Labour MP Pete Hodgson said the pressure had forced Mr English to do the right thing.

"But we believe other issues around his housing allowance still need to be cleared up -- in particular his actions late last year and early this year when he was trying to qualify for the larger allowance. For example, we still don't know why Mr English changed his trust deed and why John Key accepted this," Mr Hodgson said.

"Given Mr English has told everyone else to tighten their belts, he had no choice but to not take any housing allowance. We welcome anything that attempts to tidy up this messy situation.

"Whatever the technicalities, its clear that Mr English has not lived in Dipton for some time and it's regrettable that it has taken pressure from the media and the Opposition for him to finally admit this."

Mr English said his family home in Dipton was where he was raised with 11 siblings, it was located on English Road and his family had been there for 120 years.

"It is not really up to anyone else to decide just whether it is home."

Mr English would not expand on why he changed the arrangements of his trust deed, saying it was for family and personal reasons.

He had been following advice and the rules about how to declare his interests both as an MP and a minister.

Previous Speakers had signed off his family arrangements when he was receiving an MPs housing allowance.

Asked about the poll, Mr English said the fact there was a poll on the issue showed how out of proportion it had become.