Eventually, the total breakdown of relations between Myles and the majority of the Government led to him and another dissident, Hamish MacIntyre, breaking away to become independents in late 1991 and then proceeding to form the Liberal Party in 1991.
[5] Myles instigated a political scandal when in September 1992 he accused former Labour MP Fred Gerbic of operating a graft while he was a minister.
Myles, under Parliamentary privilege, alleged that Gerbic took financial donations in exchange for residency approvals in his capacity as associate Minister of Immigration and in support tabled a transcript of an alleged tape recorded conversation between two Auckland Labour Party members.
At the 1998 local elections Myles stood for a seat on the Auckland City Council in the Avondale-Roskill ward as an independent candidate.
[8] Myles re-entered parliament for a brief period during 1999, following the total breakdown of the New Zealand First – National coalition government and the resignation of former NZ First MP turned Independent minister in the National government Deborah Morris over the prioritisation of military expenditure over social expenditure in the 1999 budget.
Some controversy emerged as Morris issued a tape-recorded telephone conversation between her and Myles where he admitted that he would immediately quit NZ First upon arrival in Parliament and would support the struggling Jenny Shipley-led National Government (This did not end up occurring, following threats of discipline by Peters and other NZ First party members).