The Otago Daily Times believes Mr Benson-Pope is considering standing as an Independent Labour candidate at the next election, urging voters to give him the electorate vote and to tick Labour for the party vote.
Mr Benson-Pope yesterday failed to publicly rule out standing as an independent MP, despite reportedly telling Prime Minister Helen Clark there was "no substance" to yesterday's ODT's report.
A spokeswoman for the Prime Minister said Mr Benson-Pope had rung party whips on Wednesday night to say it was likely the ODT would publish the story.
"He advised her [the Prime Minister] there was no substance to it," .
However, Mr Benson-Pope has so far failed to publicly deny the story by unequivocally stating he will not stand as an independent.
National Party deputy leader Bill English was yesterday questioning Dr Cullen about the role of the Engineering, Printing and Manufacturing Union in supporting Labour during the election campaign when he slipped in a question about Mr Benson-Pope.
He asked Dr Cullen whether he was aware the Electoral Finance Act would prevent Mr Benson-Pope from putting out political advertising material asking for the electorate vote and telling voters to tick Labour for the party vote, unless the material was authorised by the Labour Party.
Dr Cullen replied he was confident that situation would not arise.
Mr English persisted with another two questions, but Dr Cullen refused to rise to the bait.
Mr English said later it was not clear under the Electoral Finance Act how Mr Benson-Pope could legally stand as an independent and at the same time recommend a party vote for Labour.
The ODT was told yesterday Mr Benson-Pope had spoken to senior colleagues about the claims he might stand and had continued to stress his loyalty to the party.
However, it is understood he received many messages of support from people in the Dunedin South electorate.
When contacted in Wellington, Mr Benson-Pope declined to make further comment other than what he said to the newspaper on Wednesday: that his loyalty to the party was beyond question.
Dunedin South Labour Electorate Committee chairman Richard Good said senior party sources and those close to Mr Benson-Pope were "confident of David's loyalty".
Prime Minister Helen Clark might have to deal with the issue sooner than expected. She is visiting Dunedin on June 9 and 10.
On June 9, she will attend a dinner with students, which Mr Benson-Pope and Dunedin North MP Pete Hodgson will also attend.
The next day, Miss Clark will attend the opening of the Dunedin Chinese garden and a Labour Party fund-raising dinner in the evening.
Additional reporting: The New Zealand Herald