Sir Peter Jackson has called for an overhaul of the Film Commission in a report that shows wide discontent with the "adversarial" organisation.
The Lord of the Rings director co-wrote the review of the commission with David Court for Arts, Culture and Heritage Minister Chris Finlayson.
The report says government funding through the commission is "critical" for the industry and it should not be dismantled.
However, it includes extensive negative feedback from the industry grouped under six headings, all of them harshly critical.
Below is a selection of the industry's attitudes presented in the report:
"An us and them attitude"
"There's almost an us and them attitude. It's death to creativity."
"Hollywood can be very tough but they don't treat you with the level of contempt that the Film Commission does."
"Creative interference has expanded until now it resembles micro management."
"The staff should be empowered and accountable"
"The politics between staff and Board are Byzantine. Decisions are often incomprehensible."
"Part of the problem is the Film Commission is trying to carry the whole industry. It shouldn't reward mediocrity."
"Film and bureaucracy don't go together"
"I find it annoying when they have a new scheme. What I'm doing never fits."
"Distant and unapproachable"
"The climate is crushing the talent. They don't really see what we're saying. They don't understand our world."
"The Film Commission can be very intimidating - that's the perception. They're seen as gatekeepers. They don't have a lot of engagement with the younger film making community - the online stuff, what's actually happening."
"A culture of not believing"
"There's no blind mechanism for giving feedback to the Commission, and you can't bite the hand that feeds you."
Sir Peter and Mr Court were asked to review the commission 31 years after its inception to assess whether it was working "in the most effective way possible as New Zealand's film funding agency".
They have suggested a new model for the organisation that is "involved" rather than "aloof" and "co-operative" rather than "controlling".
"There is an obvious question: 'Do we need the New Zealand Film Commission?'," the report asked.
"The answer is unreserved: Yes," it said.
"Movies showcasing New Zealand culture and character would be virtually impossible to make if we were to lose this critical funding provided by the Government and the State Lottery.
"We believe it is in every New Zealander's interest to have a strong, successful film industry of which we can all be proud."
The Film Commission board's chairwoman, Patsy Reddy, said she was concerned the report showed some people in the industry felt the Commission was a barrier to their film making aspirations.
"It's a tough position we're in - there's never enough money to go around. But we believe we can do better.
"We have already been talking to filmmakers during the course of this review about ways to improve our work with them," Ms Reddy said.
But she was pleased to have such a strong affirmation of the importance of the Film Commission's role, she said.