The National Party says it is not breaching a Coalition agreement on policy around transgender participation in community sport, despite a suggestion from New Zealand First leader Winston Peters it has.
Meanwhile, a Labour MP labelled the policy as "disgraceful", "nonsensical" and another example of the Coalition Government "picking on a minority group". The NZ First-led policy threatened to cut millions in funding for sports bodies if they refused to exclude transgender athletes from grassroots competitions.
But, after receiving feedback from Sport NZ, Chris Bishop revised the Government's planned involvement to a more observational role.
"I am committed to upholding the National-New Zealand First coalition agreement which commits the Government to ensuring publicly funded sporting bodies support fair competition that is not compromised by rules relating to gender," the Sport and Recreation Minister said in a statement.
"As I've said, this is a tricky issue for sports to navigate. Some have already adopted different rules on the grounds of fairness and safety.
"I'm keeping a watching brief on the issue."
In a follow-up interview, Peters stated: "There are many interpretations of a 'watching brief', and you're hearing one right now, because what I'm watching is a breach of the Coalition agreement."
However, asked directly in the same interview, he said Bishop was not in breach of the Coalition agreement. The deputy Prime Minister did say he intended confront Sport NZ chief executive Raelene Castle about the issue, potentially at the Super Rugby Pacific final on Saturday.
On Friday's AM political panel, National MP Paul Goldsmith said it was "not his understanding" there had been a breach of the Coalition agreement.
"We believe that we're within the spirit of the Coalition document," Goldsmith said on the transgender issue.
"These are the things we're working out way through. The Coalition is in good, strong heart.
"There's always a range of opinions on various topics but we believe we've done what needed to be done to keep within the Coalition documents."
Labour MP Willie Jackson was on AM with Goldsmith and labelled the policy "nonsensical stuff from Winston".
"We're talking community organisations, we're not talking the All Blacks or the Warriors - let the community organisations embrace everyone and all genders. If they have some transgender people involved, terrific.
"Let our local clubs decide what is right for them, select and play with whoever they want.
"To force this policy on community organisations is disgraceful from NZ First. Go jump in the lake, Winston.
"They should hang their heads in shame. This is about picking on a minority group, just like they're picking on disabled people, Māori, right across the community," said Jackson.
