Prime Minister John Key says he battled to block an attempt to sell part of Solid Energy to large companies overseas.
Mr Key has described what he calls 18 months of fighting between Cabinet ministers and the board of the state-owned coal miner.
John Key. Photo: RNZ
His comments come as Solid Energy's former chief executive Don Elder and its former chairman John Palmer prepare to face a select committee hearing on the company's financial meltdown.
The company is grappling with a $389 million debt following a collapse in coal prices and expensive investments in non-coal energy schemes.
Mr Key described a lengthy battle with Mr Palmer over plans to sell part of Solid Energy to large companies overseas.
"As I explained to him on numerous occasions, we weren't going to have trade sales in foreign partners ... and when we decided to do any capital injection it would be through the mixed ownership model, which would be putting New Zealanders first."
Mr Palmer could not be reached for a response but said earlier he would not be making any substantive comment ahead of his appearance at the select committee.
Mr Key thinks the former board and management of Solid Energy brought part of the crisis on themselves with plans for expansion which he did not believe could be achieved.
"They had very strong aspirations to be a Petrobras - very much a diversified natural resources company - that would have required the Government to have significant investments.
"It was at a time when we didn't have the resources to do that or the belief that they could actually pull that off."
He said an independent forensic analysis carried out for the Government identified significant problems which had been matters of strong contention between the Government and the previous board and management for 18 months.
Ex-bosses to appear at select committee
Don Elder. Photo: SOLID ENERGY
The Labour Party had been pushing for Dr Elder to appear before Parliament's Commerce Committee and its chairman, National MP Jonathan Young, had invited him to appear on Thursday.
In a statement on Tuesday, Dr Elder said he has always been willing to answer questions from the MPs.
"I made myself available to assist the Solid Energy team at last week's sitting of the committee, but was advised that I was not required to be present. I have never refused to cooperate.
"I will endeavour to help the committee in any way I can, subject to the lifting of obligations imposed on me by Solid Energy."
Dr Elder has asked that the media leave him alone in the lead-up to his select committee appearance.
A statement distributed by his lawyer says the select committee is the appropriate place for Don Elder to answer questions.
Dr Elder stood down as chief executive last month, shortly before Solid Energy revealed it was in talks with its bankers and the Government about its $389 million debt.
Solid Energy has retained him in a two-month advisory role until April and he is still being paid his $1.3 million salary.
Former chairman John Palmer told Radio New Zealand's Morning Report programme on Tuesday that he is happy to join Dr Elder in going before the committee.
"He has confirmed with me last night that he would be appearing and I have phoned the (State-Owned Enterprises) Minister Tony Ryall this morning to say to him that I was offering to appear, that I think it is important that I appear, and that that is my decision."
The committee's deputy chair, Labour MP Clayton Cosgrove, earlier told the programme he would like to speak to Mr Palmer and to Government ministers about the firm's decline.
"There are three shareholding ministers in the Government who were asleep at the wheel and did nothing about this in four years in office."
Mr Cosgrove said the taxpayer needs to know how its investment in the state-owned coal miner went down the toilet.
