Hopes of a cross-party agreement on emissions trading appear to have been dashed on the eve of a parliamentary committee reporting back on the scheme.
The Labour Party says it has not heard back from the Government over concerns it has raised and now expects National will push through a scheme with support of just one or two minor parties.
Radio New Zealand's political editor reports Australia and New Zealand are both struggling to reach political agreement on how to deal with greenhouse gas emissions.
New Zealand already has a scheme in place but National is reviewing it with the intention of watering it down.
Labour's climate change issues spokersperson Charles Chauvel has been disappointed by National's response to its proposals regarding emissions trading.
Mr Chauvel told a climate change conference in Melbourne there are clear benefits in harmonising New Zealand's and Australia's emissions schemes.
However, he said that if New Zealand adopted Australia's proposals in their current form the cost to New Zealand taxpayers would be more than $1 billion over five years.
Mr Chauvel says the Labour Party is willing to help the National Government pass an emissions trading law - but only if it retains the "all sectors, all gases" approach.
Climate Change Minister Nick Smith says National is still keen to do a deal but he will not talk about negotiations with Labour in public.
The Australian government is planning to start charging for emissions through a carbon-trading scheme from 2011.
Australia's scheme aims to cut emissions by 5% to 25% over the next decade, with the higher target dependent on a matching agreement out of global climate talks in Copenhagen in December. The scheme will be voted on again in November.
