People who describe their ethnicity as "New Zealander" or "Kiwi" will have their answers recorded in the main Census for the first time this year.
Statistics New Zealand chief demographer Mansoor Khawaja says he is ready to bow to public opinion and stop classifying people who give these answers to the Census ethnicity question under the official category "New Zealand European".
The department has also abandoned a controversial system, used since 1986, of "prioritising" the ethnic origins of people with mixed ancestry.
People who tick both the "New Zealand European" and "Maori" boxes, for example, will now be counted as belonging to both groups, so the total of all ethnic groups will add up to more than 100 per cent of the population.
Previously the answers were kept to 100 per cent by counting all those who ticked "Maori" and something else as Maori, all those who ticked "Pacific Island" and something else (but not Maori) as Pacific Island, and so on. This system left Europeans as a residual of people who ticked only "New Zealand European".
In the last Census in 2001, more than 78,000 people ignored the official boxes and wrote in their ethnic group as "New Zealander".
Another 8900 wrote "Kiwi", 2200 wrote both "Kiwi" and "New Zealander", 8100 wrote "Pakeha", 806 wrote "white" and 203 wrote "native".
All were classified in the published statistics as "New Zealand European".
Mr Khawaja said the department had seriously debated the issue for this year's Census, due on March 7, and had agreed to list a new category of "New Zealander" because that was "the wish of the people".
"This issue has been debated at international conferences - whether 'New Zealander' is an ethnicity, or whether 'Canadian' is an ethnicity. But you can't force people to say that this isn't an ethnic classification."
Waikato University demographer Ian Pool said New Zealand was the first country to let people claim several ethnicities in censuses from 1986, adopting the "prioritisation" system to keep their answers totalling to 100 per cent of the population.
He said that system was wrong, but so was the new system of multiple answers adding to over 100 per cent.
"The problem is with cross-tabulations such as ethnicity and age or ethnicity for Taupo," he said. "I'm just having terrible problems with fertility where you get figures for more than 100 per cent of births."
He said the department should add an extra question after the ethnicity question asking people who ticked more than one box to say, "Of those, which do you consider to be the most important?"
But Mr Khawaja said such a question was considered and rejected because there was not enough space on the Census form.