The co-leader of New Zealand's Green Party has resigned three weeks after confessing she committed welfare fraud as a struggling young mother more than 20 years ago.

Metiria Turei said Wednesday the scrutiny on her family following her disclosure had become unbearable and she worried she was hindering her party's chances six weeks ahead of an election.

Polls indicate support for the Green Party has plummeted since Turei's confession and the appointment last week of Jacinda Ardern as opposition leader.

The liberal Green Party is the nation's third-largest party, with 12 seats in the 119-seat Parliament.

Turei made the confession as part of an attempt to energize debate about the difficulties of living on welfare. The Green Party will now run its campaign with a single leader, James Shaw.