Labour is calling for an urgent report into Havelock North's education needs, claiming the Government has short-changed the community.
Eight new classrooms are to be built in a $4 million government spend to help with expanding rolls at Lucknow School, Havelock North Primary School and Te Mata School.
It is part of a $53.5 million Hawke's Bay, Tauranga and Hamilton schools package announced in the Government's Budget.
Labour's candidate for the Tukituki electorate, Anna Lorck, said an urgent report into the future education landscape of Havelock North was needed to provide the community with an open and transparent process.
She said the Government had "scuttled the promised new primary school".
Tukituki's National MP Craig Foss said the $4 million investment was from the southern end to the northern end of Havelock North, "so actually it's a time for celebration".
He said he had spoken with all three principals and they were ecstatic.
It is the latest chapter in an ongoing conversation about the relocation of Te Kura Kaupapa Mori o Te Wnanga o Whare Tapere o Takitimu in Hastings which was set to build its new premises at a 2.8-hectare site along Arataki Rd in Havelock North. However, an odour problem from nearby Te Mata Mushrooms company has forced the Ministry of Education to consider alternate sites.
An environmental assessment of the site will be completed within a couple of months to determine whether the school will remain there.
Mr Foss said while the ministry was evaluating other sites, he was asking questions about whether it is "the right school in the right place at the right time".
"I'm confident at the end of the day there will be a solution that everyone will accept."
However, Ms Lorck said the eight new classrooms proved that Havelock North needed a new primary school.
"Instead the Government wanted to use the land for other education needs with a $12.9 million kura relocation."
Her main concern was that National was framing up a different plan for creating mega-schools at Havelock North and parents needed to know what it meant for their children's education, with rolls reaching 700 students.
Hastings councillor Malcolm Dixon said the Government was using this new proposal as an escape clause.
"We should've had a new primary school. What they are doing now is crowding, or overcrowding the schools to make up for it."
He said the schools that would receive new classrooms needed the pressure taken off them, but figures showed Havelock North needed a new primary school.
Mr Dixon agreed with Ms Lorck, saying a report was needed because they needed to know the numbers of children needing education so they could accommodate them.
Mr Foss said he was aware of capacity issues but issues around the mushroom farm had influenced everything.
"At the end of the day we've put a $4 million investment into Havelock North, that's pretty good. So let's celebrate that ... for our kids."