Finance Minister Bill English has questioned the viability of Solid Energy as he considers a host of State-owned companies facing financial difficulties.
Learning Media, which produces educational material, is the latest to join the list of struggling SOEs. It says a range of challenges is affecting the sustainability of its business.
Mr English said the Government owns a number of companies precisely because they do have difficulties.
He said the Government will not necessarily prop up failing businesses - but the only one where there's a question about its viability at the moment is Solid Energy.
Solid Energy has debts of about $400 million. New Zealand Post also faces challenges.
Mr English said the Government is prepared to help SOEs which it thinks have a sustainable future. He said KiwiRail is one example.
Richard Norman, a professor of management at Victoria University, said Mr English is sending a message to other state-enterprises to clean up their shop and telling them not to take the Government's support for granted.
Professor Norman said Solid Energy would not be the first State-owned enterprise allowed to fail.
Mapping company Terralink went into liquidation in 2001, after then-Finance Minister Michael Cullen refused to bail it out.
More job losses - Labour
The Labour Party says there will be more job losses and a huge cost to taxpayers if the Government allows Solid Energy to be run into the ground.
State-owned enterprises spokesperson Clayton Cosgrove said it will interesting to see if Mr English does do a U-turn on an earlier promise not to let the company fall into receivership.
If that does happen, Mr Cosgrove said it will cost jobs and taxpayer dollars.
The Council of Trade Unions says the Government's preference is to sell state owned enterprises rather than nurture them.
CTU secretary Peter Conway said he hopes Mr English is just speculating about the future and will not abandon the company.