Prime Minister John Key halted a joint Government-Auckland City Council business plan for an international convention centre when SkyCity indicated it was keen to expand, Cabinet papers have revealed.
Documents released by the Labour Party show that Mr Key, in his capacity as Minister of Tourism, personally stepped in after learning of the possibility of a bid by the casino.
Mr Key said yesterday he "utterly rejected" claims he had an unfair amount of influence over the tender process.
"I went and spoke to a number of parties, made it clear that I was keen on a convention centre being built. From there, the process went through the normal, standard ... tendering process."
A briefing paper released by Labour shows that a feasibility study on a new convention centre was completed in August 2009.
Mr Key was briefed on the findings and officials recommended moving to the next stage - a business case for a convention centre. At the same time, he became aware that SkyCity was proposing to expand its convention facilities.
The briefing paper said: "The Minister of Tourism directed officials to stop work on the business case development [for the convention centre] and to wait for the proposal from SkyCity."
In November 2009, Mr Key had dinner with the SkyCity board. He later revealed that at this dinner he encouraged SkyCity to make a pitch for the convention centre and the company's board raised gambling concessions.
Labour claims that this dinner "sealed the deal" between the Government and SkyCity.
In March 2010, Cabinet called for expressions of interest for the convention centre. Five bidders, including Ngati Whatua and The Edge, made tenders but the Government has decided to negotiate with SkyCity.
Labour leader David Shearer said Mr Key had intervened in the process and turned it into a one-horse race.
"The entire process, which has cost taxpayers hundreds of thousands of dollars, appears to have been just a smokescreen to cover up the fact that a deal has already been done."
Mr Key said yesterday he would not bow to calls from the Opposition to restart the tender process, because no other bidder could come up with a better offer than SkyCity.
He confirmed that he "advised himself" to seek a deal with SkyCity to pay for a convention centre in return for relaxing gambling legislation.
Asked again whether it was he or SkyCity who first broached the possibility of more pokie machines as an exchange, he said it was "inherent" that in a situation where no Government money was offered other ways to cross-subsidise it were needed.
The Prime Minister said he believed there was no strong public opposition to the deal, but a TV3 poll showed that 72 per cent of New Zealanders opposed it. A poll of National Party voters showed 60 per cent opposed it.