Communications Minister Mitch Fifield knew for weeks that Stephen Parry could be a dual UK-Australian citizen, but said nothing after the then Senate president confessed to him.
Mr Parry also confided in an unnamed member of the outer ministry about his citizenship concerns. He revealed the concerns after former cabinet minister Fiona Nash referred herself to the High Court.
Fairfax Media has been told Mr Parry was advised not to go public and refer himself to the High Court about his citizenship issues, despite believing his situation was similar to that of Ms Nash, because it was likely she would be cleared.
Instead, Ms Nash was booted from Parliament by the High Court and on Tuesday Mr Parry sensationally revealed he was a UK citizen and announced his decision to quit.
Senator Fifield told Fairfax Media on Thursday night that "former senator Parry mentioned to me a few weeks ago that he was endeavouring to check his family's records".
Senator Fifield said the onus was on all senators and members to satisfy themselves of their circumstances and "I encouraged Senator Parry to do so", a comment at odds with suggestions he told Mr Parry to stay quiet.
"He called me on Monday to say that he had sought advice from the British Home Office and had advised the Attorney-General of this."
The fact Mr Parry chose to stay quiet has raised questions about his integrity and heightened concerns that other MPs could be keeping quiet about possibly being dual citizens.
Senator Fifield's admission that he knew of Mr Parry's concerns also raises questions about the government's handling of the affair; precisely who knew what, and when, has become a central question.
Prime Minister Malcolm Turnbull has said he only found out on Tuesday that Mr Parry was a dual citizen.
Allies of the former senator say he has been hurt at public criticism from colleagues over his decision to stay quiet, given high-level advice not to refer himself to the court.
Mr Parry declined to comment when contacted.
Meanwhile, federal Labor is split over whether to back a citizenship audit of all federal MPs, with growing internal pressure on Opposition Leader Bill Shorten to reverse course and take the moral high ground to help bring the fiasco to a head.
Mr Shorten is now prepared to shift his position and back an audit of MPs' citizenship, according to a senior ALP source, as he believes his party has nothing to fear from a probe.
However, he needs to be convinced an audit would actually be effective, while details about how it would work and who would run it need to be worked out.
Mr Shorten, Mr Turnbull and their respective ministers have been in lockstep, publicly arguing against a full audit of all MPs' citizenship records, since former senator Parry fell on his sword.
Some Turnbull government MPs fear if more lower house MPs are referred to the court and found to not be validly elected, the government could fall at a byelection.
Mr Parry's decision to quit just days after the High Court ruled five members of the so-called citizenship seven were invalidly elected has triggered a major shift among Labor MPs, who now think an audit is inevitable.
Fairfax on Thursday spoke to eight ALP MPs, including members of the shadow ministry, who confirmed they thought Mr Shorten should reverse his party's position.
Those MPs said Mr Shorten's visit to Israel had delayed discussions but that, with the Opposition Leader back in the country, there was a growing expectation the leadership group - nicknamed the ''Gang of Seven" and comprising Mr Shorten, Tanya Plibersek, Penny Wong, Don Farrell, Tony Burke, Chris Bowen and Jenny Macklin - will review the party's stance.
As one shadow minister, who asked not to be named, put it: "people are of the view that the pressure for the audit will just continue until the government holds one, so we should get ahead of the game and support one".
Another said, "I would not be surprised if there is an about face in the next few days. Now the High Court has ruled, there is ample room for us to pivot."
A third said the situation "has reached the point where this is a farce and people are questioning the legitimacy of the Parliament".
One proposal being discussed would see a retired High Court justice or justices charged with overseeing the auditing process, assisted by a team of public servants, which would then make recommendations for referral of cases to the court.
Queensland MP Graham Perrett was the only Labor MP willing to speak on the record, telling Fairfax Media that "I don't have a problem with it [an audit]."
Former cabinet minister Kevin Andrews, meanwhile, joined fellow Liberals Eric Abetz, Craig Kelly and Llew O'Brien, ???and former NSW premier Barry O'Farrell, in supporting the probe on Thursday.
"If I was the prime minister I would be ordering the [Australian Electoral Commission], for example, to undertake an examination of every MP and senator and report as soon as possible back to the government," he told Sky News.
Mr Turnbull questioned the utility of an audit and reminded MPs they had an obligation to comply with the constitution.
"What is an audit? Does that mean that somebody is going to undertake extensive genealogical research on every member of Parliament and senator? Undertake extensive research into foreign laws?"
Labor Senate leader Penny Wong said Labor had strong processes to vet candidates and that "ultimately the only body under our constitution that can determine if an MP or a senator has dual citizenship and is not entitled to stand is the High Court".
The Greens, the Nick Xenophon Team and crossbench senators Cory Bernardi and Derryn Hinch have already backed the move, which would examine the citizenship status of all MPs to ensure they complied with section 44 of the constitution.
Greens leader Richard di Natale again called for the major parties to back the audit and also backed a referendum to change section 44 of the constitution.