Former Environment Minister and sitting National Party MP, Nick Smith, is defending $180,000 of government funding for the Mackenzie Futures Trust.
The Labour Party accuses Dr Smith of cronyism, saying the trust had been turned down under the open tender for the Community Environment Fund, within the Ministry for the Environment, but later received the money directly from that ministry.
Labour claims officials were concerned about what the party describes as a pet project of Dr Smith's.
However, Dr Smith says the trust was a very cost effective way of trying to reach agreement on contentious water, landscape and biodiversity issues in the Mackenzie Basin.
He says officials were concerned the various parties were so far apart an agreement was unlikely.
That turned out not to be the case.
Dr Smith resigned his ministerial posts after signing a letter for an ACC claimant while the ACC minister.
He says any decision about a possible return to Cabinet is entirely up to the Prime Minister.