The Government is investigating a potential outbreak of genetically modified fungus at Lincoln University.
Two secured laboratories and a greenhouse have been locked down as the Ministry for Primary Industries (MPI) checks the biological scare.
Lincoln University researchers informed MPI and the Environmental Protection Agency on March 7 that it had evidence to suggest a fungus (Beauveria bassiana) supplied for research was potentially a strain modified genetically to include a marker so it could be traced in plants.
The fungus had been believed to have been a "wild strain" that is already present in the environment and so was being researched outside approved genetically modified (GM) containment facilities.
Work undertaken by the researchers indicated that the fungus had already been genetically modified.
After the alarm was raised, containment procedures were put in place.
Experts are testing whether the fungus is genetically modified and, if so, the extent of its presence outside approved GM containment facilities.
"The university and MPI take potential breaches of containment very seriously and the investigation into how it occurred will be thorough," university vice-chancellor Stefanie Rixecker said.
"Although there is no evidence to suggest the genetic modifications made to the fungus in question have increased any health risk to humans or animals, there is a clear process that we must follow to ensure containment and that the same breach cannot happen again."
The fungus was being researched on campus property in glass houses and laboratories with restricted access.
MPI and the university say they are confident that all of the known samples and plant materials containing the fungus are now contained.
The fungus Beauveria bassiana occurs naturally in soils throughout the world, including New Zealand, and infects a wide range of insect species.
It is used as a biological insecticide to control a number of insect pests.
The scare should be a "massive wake-up call" to New Zealand's environmental regulators, the Green Party said today.
"It's absolutely not acceptable that almost two weeks after this breach the ministry still doesn't know how it occurred," genetic engineering spokesman Steffan Browning said.
"New Zealanders are constantly reassured that GE organisms are contained securely when used in research, but here we have another example of those restrictions not working. We deserve answers now about what has gone wrong here, and how the Ministry are going to assure it doesn't happen again."
Lincoln University and Crown Research Agencies have previously been implicated or found responsible for other GE experiment breaches, with some trials closed down, Mr Browning said.