June 1984 and a drunken decision late one night leads to a snap election. Sir Robert Muldoon's ruling National Government is thrown out of office and David Lange's reforming Labour Party voted in. But before they could take power, an unprecedented constitutional crisis gripped the country and for three days, no one knew who was in charge.

In a new episode of RNZ's Eyewitness podcast, Sir Jim McLay tells Justin Gregory about the day he faced down the most dominant politician in living memory.

"I am not going to devalue so long as I am Minister of Finance!" - Sir Robert Muldoon.

Late on the evening of 14 June 1984, National Party Prime Minister Sir Robert Muldoon walked unsteadily down a corridor in Parliament towards waiting journalists. He stared glassily into a TV camera and announced that the country would go to the polls early.

The date he chose for the snap election was 14 July, just four weeks away. RNZ journalist Richard Griffin suggested it didn't give Muldoon's party much time to run up to an election. The Prime Minister slurred a famous reply.

For nearly a full parliamentary term, Sir Robert had led a government with just a single seat majority. When National backbencher Marilyn Waring announced she would vote against her party on certain issues, Muldoon decided he couldn't continue on that basis.

Standing just behind Sir Robert that night was Jim McLay. Now Sir James McLay and a senior diplomat, in 1984 he was 39 years-old, the Attorney General of New Zealand as well as Deputy Prime Minister. McLay had been in the job for just a few short months; he and Muldoon had "a very correct relationship. We were not particularly compatible spirits. It wasn't difficult, but it wasn't super-friendly either."

"We certainly weren't drinking buddies".

For some time, McLay had thought a snap election likely and during the short campaign fully supported his leader. But Labour won in a canter. McLay expected Sir Robert to follow established convention and obey any instructions he might be given during the few days it would take Labour to form a new government.

But McLay was wrong. Instead, a defeated Muldoon dug in his toes on one crucial issue.

For many months prior to the election, the Reserve Bank had been warning Sir Robert that an overvalued NZ dollar was vulnerable to speculation. They recommended a 15% devaluation. Muldoon disagreed…

Go to this episode on rnz.co.nz for more details