After a 5pm deadline passed today for Labour Party leader Andrew Little to retract and apologise for his allegations against Earl Hagaman, the hotel group founder's wife has said she'll "see Mr Little in court".

Mr Little was threatened with the prospect of legal action by the founders of the Scenic Hotel Group, Earl and Lani Hagaman, after questioning the timing of a $100,000 donation Mr Hagaman made to the National Party, and his Scenic Hotel winning a contract to run a Niue resort.

Mr Little called on the Auditor General to investigate the donation.

Mrs Hagman said today the allegations are "hurtful, highly offensive and totally false".

"While Mr Little may be entitled to call for an investigation there is a correct process in which to do this. In my opinion a public flogging is not the correct process.

"We're incredibly disappointed he hasn't apologised and retracted what he said," Mrs Hagaman said.

"If Mr Little had taken the time to get to know us he would have found out that neither Earl nor I come from power or privilege, nor upbringings that cultivated expectation of favours. We are simply hard working people.

"While age and health issues are against Earl this donation was something he personally wanted to be able to do."

She said if there was "one thing I hope comes out of this situation [it's] that people should be allowed to feel proud about who they vote for".

"That includes the freedom to donate to whichever political party their conscience tells them they should support."