The Labour Party says the Government's decision to approve the sale of 16 Crafar farms to foreign buyers is "gutless" and "unpatriotic".
Leader David Shearer says the decision to let a Chinese investor, Shanghai Pengxin buy the suite of North Island dairy farms, opens the way for more New Zealanders to become tenants in their own land.
He says the Government did not have to follow the recommendation of the Overseas Investment Office and could have vetoed the deal.
Land Information Minister Maurice Williamson - who with the Associate Finance Minister approved the sale - says the fuss over the Chinese purchase is xenophobic.
He says, at 7,800 hectares, the land area involved is a fraction of the total purchased by foreign investors in the past two years.
Mr Williamson says it seems some people have a distinct barrier in their mind to Chinese investment in New Zealand, while accepting investment by other foreigners.
Meanwhile, Prime Minister John Key says New Zealand needs foreign investment if it is to grow.
He says, in this case, the farms will be managed by Landcorp, providing employment opportunities for New Zealanders.