New Zealand On Air chairman Neil Walter is expected to stand down soon with National Party official Stephen McElrea a contender to replace him, television industry sources say.
The two men have been at the centre of a controversy over the timing of Bryan Bruce's documentary on child poverty screened four days before the election, claiming it opened the funding quango to accusations of bias.
McElrea complained to NZ On Air which sent TV3 a terse letter of complaint but TV3 went ahead anyway.
Critics have complained that NZ On Air, far from ensuring its reputation for independence, overreacted.
Walter is due to retire soon and it is understood McElrea has indicated interest to the Government in the role or in being appointed as deputy chairman, two production industry sources said.
In the past the funding agency has been headed by a senior public servant such as Mr Walter.
It is understood the Ministry for Culture and Heritage is recommending a former staffer from the Ministry for Foreign Affairs and Trade.
The Government has made no decision yet on a new chairman.
NZ On Air has always had political appointees but appointing as chairman someone like Mr McElrea - with strong direct party political connections - would mark a change in approach.
One producer said the latest row already had a subtle effect of influencing how proposals would be presented on potentially contentious documentaries.
New Zealand On Air has dug itself in deep over allegations it is open to political intervention. On December 16 the Business Herald reported McElrea had taken a role in three documentaries looking at social welfare, law and order and health. TV3 owners MediaWorks refused to comment on whether it was comfortable with the New Zealand On Air processes.
It is understood that Prime Minister John Key strongly supported McElrea's appointment to the funding quango in 2009.
As a member of New Zealand On Air he also has a say in the allocation to current affairs shows Q & A and The Nation.
NZ On Air cut funding to The Nation last year - a decision that led to Sean Plunket losing his interviewer job.
The Screen Directors Guild of New Zealand has raised concerns about the Bryan Bruce documentary.
"We have a lot of members putting pressure on us to ask Stephen McElrea to resign.
"His actions have shown poor judgment and there are real concerns that as he leads a documentary working group responsible for selecting titles within strands he will bring his political hat to the table in this role," said acting chairwoman Janette Howe.