Premier Kathy Dunderdale says there is no point discussing allegations that one of her cabinet ministers threatened to withhold government money for a new school in Gander, because Kevin O'Brien has assured her it's not true.

Kathy Dunderdale at the house of assembly September 17 2013

Premier Kathy Dunderdale says she trusts Kevin O'Brien's defence against allegations he threatened to withhold spending on a new school. (CBC)

O'Brien has come under fire over allegations that he has on several occasions put pressure on the Gander and Area Chamber of Commerce, most recently to revoke invitations to two NDP members to take part in a community breakfast.

Former chamber president Barry Warren, who lost to O'Brien as the Liberal candidate in the 2011 election, told CBC News that O'Brien had acted like a bully during his period with the group.

He also alleged that O'Brien threatened to hold up funding for Gander's new school if the chamber spoke out against government decisions.

Dunderdale told reporters that O'Brien has told her the complaint is not true.

"I've asked him about it, he said it didn't happen, and I accept his word from that," Dunderdale said Tuesday.

"Everybody that I'm talking to says they want to move on and that's what I'm prepared to do."

Dunderdale said she has spoken with members of the Gander and Area Chamber of Commerce who believe the issue has been blown out of proportion.

O'Brien has not yet commented publicly on the latest allegations, but last week said he played no part in the chamber's decision to revoke invitations to MHA George Murphy and former NDP candidate Lukas Norman, who had earlier been asked to help serve breakfast at the Festival of Flight this summer.

Click on the video above to see Here & Now's Debbie Cooper speaking with MHAs David Brazil, Dale Kirby and Andrew Parsons debating the O'Brien issue.