Ms King said she believed Senator Nash had breached ministerial standards by employing Mr Furnival and failing to declare his interest when meeting with state and territory ministers about the star rating system in December.

The ministerial code of conduct binds staff to ''divest themselves, or relinquish control, of interests in any private company or business … involved in the area of their ministers' portfolio responsibilities''.

Senator Nash told the Senate last week Mr Furnival had ''no connection whatsoever'' with Australian Public Affairs. She later told the Senate Mr Furnival had a ''shareholding'' in the firm. But company documents lodged with the corporate regulator show Mr Furnival is in fact the co-owner of the company, through a parent company he owns with his wife.

Ms King stopped short of calling on Senator Nash to resign, saying it was up to Mr Abbott to explain how he thought Senator Nash had complied with standards.

''Given, to date, Senator Nash and the Prime Minister have continued to try and remain silent on this issue we will obviously pursue this matter through all avenues available in the Parliament,'' Ms King said.