The Government says the expulsion from Fiji of New Zealand's acting High Commissioner will not distract it from trying to restore democracy to Fiji.
The Pacific Islands Forum will hold a leaders' meeting in Papua New Guinea next month to decide how to respond to the action of Fiji's interim administration in breaking its promise to hold elections in March.
Foreign Minister Murray McCully says some forum leaders may be distracted by recent events but the New Zealand Government will not let attention be drawn away from the task of returning a democratic government to Fiji.
He says next month's meeting is "something of a watershed".
Fiji announced on Tuesday that it is expelling New Zealand's acting High Commissioner, Caroline McDonald. Wellington retaliated by ordering Fiji's interim High Commissioner in Wellington, Cama Tuiloma, to leave the country.
Fiji also told Australia that its South Pacific defence adviser will not be granted a long-term visa to remain in Fiji.
Canberra says the defence adviser has been in Suva on a visitor's visa, pending a decision by the interim administration on his longer-term status.
Ms Macdonald must leave Fiji within a week. Her husband, Simon Mark, is New Zealand's trade commissioner and there are concerns he will also be departing.
The chairman of the New Zealand Pacific Business Council, Gillbert Ullrich, says this would mean a further breakdown between the two countries.
Mr Ullrich says he is not certain the spat with Fiji is warranted. He says business groups were hoping a change of government in New Zealand would allow a more constructive dialogue with Fiji.
Diplomat acted inappropriately - Fiji
Fiji's interim Attorney-General says his government ordered Ms McDonald out because she was acting inappropriately and not like a diplomat should.
Aiyaz Sayed-Khaiyum says she has actively undermined the government by only working with opposition groups.
Mr McCully says there is no validity to this assertion. Given the difficult relationship that exists, he says, Ms McDonald did not have much contact with the interim regime.
Only three New Zealand High Commissioners have ever been thrown out anywhere, Mr McCully says, and two of them have been from Fiji.
The Government says it has been working closely with Australian officials over the deteriorating relationship with Fiji.
