Green Party co-leader James Shaw has apologised for an 'error of judgement' over the funding of the private Green School in Taranaki.
Watch James Shaw speaking here:
The National Party has been ramping up the pressure on Shaw, saying if there's no contract in place, the deal should be off.
Shaw, also Associate Finance Minister, received backlash after he and other ministers signed off on $11.7m to allow the school to expand.
"I want you to know I have taken the time to reflect on your concerns and I'm acting on them," Shaw said to critics of the funding.
"Every dollar we've invested is a dollar to create jobs," he said of the shovel-ready funds.
He said he saw an opportunity to employ hundreds of people in an area most affected by the government's decision to support renewables.
He said it was a fair question to ask why the government doesn't fund public schools with run-down buildings.
Shaw said the previous government left schools in these systematically underfunded conditions and it was clear funding was not reaching them fast enough.
"If the last few days have shown us anything, it's that New Zealanders are incredibly passionate about their public education."
He said the Green Party shares that passion.
"Progress towards our better future requires tough choices. Not everyone one of those choices is going to be the right one," Shaw said.
He apologised to schools and people who felt disaffected by the decisions.
"I want you to know I have listened to your concerns."
Representatives of the Green School have approached the Crown to find a solution.
RNZ earlier reported it understood the solution would be to covert all or part of the nearly $12 million into a loan.
Shaw said ministers cannot engage in the process.
"My personal view is that the best way to do this is for the support for the Green School to come in the form of a loan rather than a grant."
"When you make a mistake, you should learn from it for the future," he said.
Shaw said it was clear to him "very early on" he had made an error of judgement.
He said it's not appropriate for him to get in the middle of negotiations between the partners and the Crown.
Shaw said he won't get dragged into stories about what the parents are doing.
He said it was not a caucus decision to provide the funding and Green Party co-leader Marama Davidson said Shaw fronted up quickly on the error.
The school's reputation has "taken a battering" from the funding decision and controversy, Shaw said.
National's leader Judith Collins and MPs visited New Plymouth yesterday, announcing a big education spending policy, but also to rally support against the Green School grant.
She cited comments made by the principal of one Taranaki school, Marfell Community School, and the "absolute anger" over money given to a private school when their school is desperate for funding.
"It's a decile 1 school, it has the principal spending four out of five days a week trying to fundraise," Collins told reporters.
"They have no extra money from parents because the parents don't have any extra money at all. Their absolutely reliant on essentially community trusts, particularly pokie funds to actually be able to buy anything for this school, including the principal having to make the curtains."
She would also like to see the business case and Treasury advice ministers relied on before signing off on the $11.7m.
Shaw yesterday told student radio station 95bFM he "missed the fact" about funding and private schools.
"I mean... I knew it was a school obviously, a private school, but it didn't occur to me that we had an exclusion on funding of private schools," Shaw told 95bFM.
Finance Minister Grant Robertson was adamant the deal had been done when asked yesterday.
"I know that Minister Shaw is seeking to come up with another plan, but I haven't heard back from him about what that is, but as I say, I think it's an issue of good faith.
"If the government says it's going to fund something, we have to go through with that even if one of our partners might regret it," Robertson said.