Wellington  - New Zealand Prime Minister Helen Clark was forced to defend her Foreign Minister Winston Peters in parliament on Tuesday following a storm of attacks about cash donations to him and his party.

Peters leads the nationalist New Zealand First party, which supports Clark's minority Labour-led government in exchange for his getting the foreign affairs portfolio while it stays out of a formal coalition.

But revelations of cash payments he received have made Peters - who is currently in Singapore at a meeting of regional powers - an embarrassment to Clark, who told journalists on Monday, "Mr Peters is an honourable member and I must accept his word unless I have evidence to the contrary."

The opposition conservative National Party, which opinion polls say is poised to oust Clark's nine-year-old government at a general election later this year, questioned the "integrity" of her administration in a series of questions about the donations on Tuesday.

The issue blew up on Friday when Peters admitted that expatriate billionaire Owen Glenn, who lives in Monaco, had donated 100,000 New Zealand dollars (76,000 US dollars) towards a legal bill in 2005.

Until then, Peters, a veteran and litigious politician who has consistently campaigned against secret donations for political parties, had strenuously denied getting the money - even producing a white card with the big printed letters "NO" at one press conference.

He justified his turnabout by saying neither he nor his party had received the donation, but it had gone to his lawyer, who did not tell him the source until Friday.

Peters' lawyer, Brian Henry, revealed the source after the New Zealand Herald newspaper published an e-mail in which Glenn admitted having given money to New Zealand First.

Another paper, the Dominion Post, said on Tuesday that one of the country's wealthiest families had donated at least 150,000 New Zealand dollars to the party, but it had not appeared in the party's annual declaration to the Electoral Commission.

In a statement from Singapore, Peters dubbed this "a smear campaign of unsubstantiated allegations," but that did not stop it also featuring at parliamentary question time.

Rodney Hide, leader of the free market ACT party, lodged a formal complaint with Parliamentary Speaker Margaret Wilson that Peters had failed to declare the Glenn donation, and Clark has said the watchdog Auditor General could investigate.

The affair is doubly embarrassing for Clark because Peters is currently attending talks with the Association of South-East Asian Nations (ASEAN) in Singapore and is scheduled to host US Secretary of State Condoleezza Rice in Auckland this weekend.

Analysts said the prime minister could not sack him, even if she wanted to, because he could withdraw his party's support, forcing her to call an early election which current polls show she would be certain to lose. (dpa)