National Party leader Christopher Luxon says Chris Hipkins has shown "really weak leadership" by failing to sack Stuart Nash.
Earlier, the embattled Minister admitted to the Prime Minister he'd broken the rules again - last year contacting Immigration officials to speed up an immigration case.
Ministers are very much not supposed to do that - but Hipkins wielded a feather rather than an axe when handing down repeat offender Nash's sentence.
"I did consider whether dismissal or resignation was appropriate in light of these two more recent instances," Hipkins said.
He decided it wasn't - sparing him a sacking but demoting him to the bottom of the Cabinet rankings. However this keeps Nash at the table.
"He's aware this is his last chance, so you know any further lapses in that area will clearly result in him no longer being a minister," Hipkins said.
Luxon said this is "really weak leadership" from Hipkins.
"This is a minister who's failed to meet the standard and uphold the Cabinet now three times. It's not personal, he has to go and he would if he was in my Government," Luxon said.
Echoed by ACT deputy leader Brooke van Velden who called Hipkins a "weak Prime Minister unable to hold his Ministers accountable".
"Even after further revelations about Stuart Nash trying to intervene in an immigration case, Chris Hipkins still can't do what he should have on Wednesday morning and sack him completely," she said.
"What do Ministers in this Government need to do to get sacked?"
Nash was attempting to help a medical professional who had their immigration case clogged in the system. Ministers are supposed to raise these things with the Immigration Minister but Nash leapfrogged that and went straight to the decision-makers.
"His intervention unclogged the case from the process but it did not result in any change to what the decision was," Hipkins said.
It's Nash's third strike in the space of three days - he resigned as Police Minister on Wednesday after admitting he'd contacted the Police Commissioner about a court sentence he didn't like.
On Thursday, it was revealed he'd been warned by Attorney-General David Parker about commenting on police cases in the past - not that anyone passed that on to the Prime Minister.
"It would've been useful to know that in advance. I think the Attorney-General didn't recall that at an appropriate time in terms of alerting me to it," Hipkins said.
Despite saying he'd asked Nash for reassurance there was nothing else on Wednesday, Nash apparently also had a case of brain-fade.
"No he did not recollect that. I accept him at his word that he did not recollect it. I however would have an expectation that he would recall something like that," Hipkins said.
The Prime Minister's confidence now waning in Nash.
"As I've indicated he's on a final warning so that does indicate that my confidence has been dented but not to the point where I think he should lose his job," Hipkins said.
Hipkins is hopeful Nash's dashed memory hasn't failed to recall anything else of note.
Jenna Lynch Analysis
Nine-lives Nash lives another day. The Prime Minister says the mitigating factor in all of this is that Nash is a bit brash, he speaks colloquially but he wasn't doing any of these things for personal gain.
Politically when you look at what he was advocating for - a tough sentence for a cop killer and for Immigration to pull finger to keep a health worker in the country - probably most in the public would think he's doing the right thing. His problem is he's done it the wrong way.
There is a risk for the Opposition in this too - Christopher Luxon dealt basically the same punishment to his MP Barbara Kuriger after she was found advocating for her son on official parliamentary letterheads. There is an element of hypocrisy in calling for a sacking when he wouldn't do it himself.
Firing Nash would have been the easy way out for Hipkins because he is a liability - but that creates a benchmark that could become problematic.
But all things considered, Nash is lucky to escape with the reprimand he has.
So Nashy - some free advice. Go buy a Lotto ticket for the special cyclone draw this weekend.
