Advance NZ's Jami-Lee Ross has threatened former co-leader Billy Te Kahika with legal action after a nasty public stoush over donations following its split from the NZ Public Party (NZPP) last month.

Te Kahika's NZPP joined forces with Advance NZ ahead of the 2020 election campaign, with the pair hoping to combine their party's followings to get a party vote above the 5 percent threshold required to get into Parliament.

But they endured a horror election night, registering just 28,434 votes - less than 1 percent of total votes cast.

The parties split at the end of October, with Te Kahika saying the NZPP would still work with Advance NZ on common goals and maintain a "strong respect and friendship" with Ross.

However the duo's relationship appears to have soured considerably in the weeks since, with Te Kahika Jr claiming Ross took all the funds from a bank account he believed the NZPP had joint access to - an allegation both Ross and his party have denied.

In an email to supporters seen by Newshub, Te Kahika alleges that when they first merged parties, Ross had offered up a bank account he already owned for Advance NZ donations to be co-managed by the NZPP.

He says party director Michael Stace became a co-signatory of the account, and that donations made to the account were used to spend on campaign materials such as billboards and brochures.

"We have never had any reason to doubt that this was a collaborative set up and we have always believed that our co-operative account was exactly that," Te Kahika Jr wrote.

However after the parties' split, Te Kahika Jr claims he was advised by ASB Bank that the account was never joint, and that Stace had been removed as co-signatory and replaced by Advance NZ board chair Michael Kelly.

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It was at this point, on November 13, that Stace emailed a request to Advance NZ for half the approximately $60,000 left in the account after any outstanding bills had been paid - a request that was swiftly rebuffed by Ross.

Te Kahika Jr said the NZPP is "outraged", and taking steps to rectify the situation.

"We regrettably announce we have lost almost $30,000.00 that we had relied on to help carry our fight forward - the money you gave us to do our work," Te Kahika wrote in a lengthy post to his 18,000 Facebook followers.

"[Ross] does not intend to give to us and has threatened legal consequences if we try and get it back. Bullying tactics."

However Ross disputes this version of events, telling Newshub Te Kahika is "bare-faced lying" by insinuating he had any claim to the funds in the first place.

"We said no [to his request for some of the money], so he is throwing a tantrum," he said.

In a November 15 letter to NZPP director Stace seen by Newshub, Advance NZ's barrister Graeme Edgeler acknowledged there was a "substantial disagreement" over the perceived arrangement between the two parties.

But he said any assertion the bank account was joint and contained the funds of both Advance NZ and the NZPP is "in error".

"The funds in that account are Advance NZ funds, and the NZ Public Party is not owed any of the funds from the account. In particular, no theft has occurred, and any suggestion otherwise is false," Edgeler wrote.

"The bank account in the name of Advance NZ existed prior to the NZ Public Party being notified as a component party of Advance NZ, and prior to the Memorandum of Understanding agreed between Advance NZ and the NZ Public Party."

"The funds deposited in the account, both before, during, and after the time that the NZ Public Party was a component party of Advance NZ, have been donations to Advance NZ."

As "a show of good faith", Advance NZ has offered to pay the costs of an ad in the Christchurch Press and an invoice from the East City Community Trust for election night party costs, provided it considers the matter settled.

But Edgeler also warned that should Te Kahika Jr continue to assert that Ross and Advance NZ are guilty of misconduct and theft, they would take legal action against him.

"We trust that this will not be necessary and that this matter can be resolved promptly on the above basis," he concluded.

Te Kahika Jr has not responded to multiple requests for comment, but Stace told Newshub "it appears Jami-Lee simply does not want to do what is right".

He also told Newsroom he's asked the police to investigate, as the NZPP believes it has a claim to about $30,000 of the funds in the account under the parties' memorandum of understanding.

Police were unable to confirm whether they were investigating for privacy reasons.