Key Points:

Niue is being encouraged to get rid of an American cult

The country's Immigration and Finance Minister Fisa Pihigia says New Zealand's Ministry of Foreign Affairs and New Zealand Aid has ticked-off the administration for allowing a "messy situation" to run on, but he has been unable to move the cult.

Two small families, said to belong to the Maha Devi Ascension Group, arrived on the island more than a year ago, saying they wanted to buy the partly Government-owned Matavai Resort.

They later changed their plans and said they wanted to build several health spas, but the resort continued to allow the families to stay in its best rooms, even though there was no sign of them paying any money.

The cult was previously in Samoa. It is reported that adherents seek to be sustained by "light energy" alone, rather than food.

Mr Pihigia told Niu FM radio station that in addition to the management of the Matavai Resort, some of his fellow politicians and key leaders had supported the group. He said the $2.4 million Matavai was built with the help of New Zealand funds.

Radio New Zealand International reported the group's members refused to speak with the media, but they had managed to obtain credit all over the island.

Niu FM reported in July that the Americans had run up a $400,000 bill in Niue, but some locals wanted them to stay, in the hope they'd bring US dollars into the cash-strapped economy.

Foreign Minister Winston Peters said previously that New Zealand "on several occasions made its concerns about the group's bona fides known to the Niue Government".

Mr Peters said Niue was told about the group's past activities in Samoa and warnings were stepped up in 2006.

Mr Pihigia previously said passports of members of the cult had been seized and they would not be able to leave without settling the debt.

- NZPA