Earthquake Recovery Minister Gerry Brownlee has rejected claims he told Canterbury residents that selling their quake-damaged homes would be the best way to withdraw equity.
Christchurch East MP Lianne Dalziel wrote to Mr Brownlee on behalf of one home owner whose house sale fell through after the quake on September 4, throwing her into financial strife.
Because the woman was not living in the house at the time, she was not eligible for emergency rental payments from her insurance company, and Ms Dalziel appealed to Mr Brownlee to help.
The Sunday Star Times reported that Mr Brownlee, in his reply, advised that the best possible outcome for people wanting to withdraw equity from quake-damaged properties was to sell them on the open market, rather than to the Government.
He said there was evidence that house sales were returning to normal levels.
However, Mr Brownlee said today that was not his position and the article had not quoted the letter correctly.
"I said `I believe the best possible outcome for people who wish to withdraw their equity from a property that has been damaged by the earthquake is to be able', this is most important, `to do so on the open market, rather than selling to Government'," he said.
"My point there is simple, at the moment they're not able and I've recognised that in the letter.
"The only way they're going to be able to get their full equity out is for the land to be remediated and returned, and that's what my intention was."
The minister's comments followed incorrect advice from his office that he stood by the comments reported by the newspaper.
Mr Brownlee said he could not advise home owners needing immediate equity from their properties on what to do.
"The Government's efforts are designed to get them back to the position they were in on September 3 as quickly as we possibly can," Mr Brownlee said.
One Christchurch resident took Mr Brownlee at the words reported by the newspaper, and posted a "for sale" sign outside his quake-damaged property, The Press reported.
Ron Edwards' sign reads: "Desirable property for sale ... Awaiting Geotech reports, AMI confirmation on rebuild or patch up. Split-level backyard, special angled upstairs dining room, unique boundary fencing, larger section due to lateral spreading and special crazy paving."
Meanwhile, the Government is also facing flak after reports that some quake-affected beneficiaries are having their payments docked because of interest accruing on their insurance payouts.
Payments from the Earthquake Commission are considered a source of income by the Ministry of Social Development, and people's pensions and benefits were being reduced accordingly, Radio New Zealand reported.
Mr Brownlee said the issue was "a work in progress".