The Niue police commissioner, Tony Edwards, says a New Zealand Defence Force employee could face charges after he allegedly caused damage at the island's only hotel, the Matavai.
There have been reports several Defence Force personnel, on the island for a scoping exercise, caused damage and annoyed guests, sparking complaints.
The hotel management will not comment, saying the matter is in police hands.
Mr Edwards says they did investigate allegations of wilful damage by one of the workers but allowed that person to leave the country, expecting the New Zealand Defence Force to conduct its own investigation.
"There was an agreement between the New Zealand Defence Force and the Niue Police for me to permit him to leave the country, making sure, as I was reassured by the NZDF that an inquiry was going to take place. So I am over here waiting to see what the outcome is of that inquiry."
Niue police commissioner, Tony Edwards.
The NZDF has not indicated what action, if any, it is taking over the incident.