Helen Clark has claimed she wanted to legalise cannabis when she was Prime Minister, but couldn't because of agreements Labour signed with smaller parties to stay in Government.
But Peter Dunne, whose United Future kept her in power, says she's "reinventing history".
Kiwis will vote this October in a referendum on whether to make recreational use of the popular drug legal. Clark, who led the country between 1999 and 2008 and is a member of the Global Commission on Drug Policy, is urging voters to tick 'yes'.
"We've got the opportunity to clean this up, get the law right, stop unnecessarily wasting hundreds of millions of dollars a year on the whole prosecution and court and apprehension process, and prison sentences as well - and also get a decent tax take and some legal jobs off it," she told The AM Show on Tuesday. "On balance, this is the right way to go."
Asked why she didn't change the law back when she was in charge, Clark said she wanted to.
"But I was stuck for the last six years I was PM with confidence and supply agreements with United Future, and they specifically wrote into them that the Government would make no move on cannabis law reform."
Dunne was a Labour Party MP, but quit after Clark took the leadership in 1993. In 2002 the party he led, United Future, won eight seats in Parliament and signed a confidence and supply agreement with Labour.
"When we talked about cannabis post the 2002 election, the wording we agreed on was there would be no change in its legal status," Dunne told Newshub, "which she said at the time was quite good because it wouldn't prevent the sort of actions her Government had in mind."
He said Clark never specified exactly what "actions" she had in mind, but in the end it didn't matter.
"She never took them. She's reinventing history to make that claim. "
Like Clark, Dunne now backs making the drug legal.
"I will be voting yes in the referendum. I think that while I've always thought you should treat cannabis as a health, not a legal, issue , I think the current legal status is an impediment to that."
Clark said if the referendum fails - as one recent poll suggested it would - it's not as if the pro-legalisation movement would go up in smoke, because the cannabis referendum is not binding.
"Plan A is to support it to pass - polls are very mixed on that, they're across the gamut... It's tight, much tighter than the End of Life Choice one. But it's winnable.
"Look, there are always prospects of Private Member's Bills, and getting Parliament to revisit it. The way the election is looking, there could be quite a big progressive majority in Parliament."
There have been two major polls published this week - one finding Labour could govern alone, one with the pro-legalisation Greens' support. Prime Minister Jacinda Ardern has steadfastly refused to reveal how she's going to vote - despite being open about her support for the End of Life Choice Act, which would legalise assisted dying.
"For euthanasia, it was never intended that that Bill in Parliament would necessarily become a referendum," she said earlier this month. "We were all voting on the actual Bill itself and whether or not that would become law. I was very open then about my voting in Parliament. It was then decided that it would become a referendum."
Clark said it was "entirely up to her" if she wanted to stay tight-lipped, but gave a hint she's probably in favour.
"I think she'll be very mindful of the Chief Science Adviser's report which was kind of balanced - 'there's this, and there's that and there's the other' - but it didn't come out saying 'this is a disaster'."
When she was Prime Minister, Clark passed the toughest anti-smoking legislation New Zealand's probably ever seen - banning it even from bars.
She said that's not inconsistent with supporting the legalisation of cannabis.
"All the smokefree legislation will apply to cannabis - you can't go into the studio and smoke cannabis any more than you could smoke tobacco in here.
"But they are different issues - cannabis is a significantly less dangerous drug than either tobacco or alcohol. I don't promote its use, right? You're not going to see me lighting up at the back of the carpark if this goes through. But the reality is that it's used, and I like to deal with reality in society - not this mythical idea of what it could be...
"The reality is it's out there. We're not being asked to vote on 'should it be available'? It is available, it's been available for decades."