Prime Minister Helen Clark wants a law curbing "attack" election advertising paid for by wealthy groups outside Parliament.
It would stifle campaigns of the sort the Exclusive Brethren ran against Labour and the Greens in last year's election.
Stung by National's claims that Labour corruptly paid for its election pledge card with taxpayers' money, Helen Clark said yesterday "real corruption" occurred when wealthy interests were able to manipulate elections.
"We would expect it will not be easy for the Exclusive Brethren to mount the kind of campaign they did last time," she said.
Labour is considering setting a limit on the amount outside groups can spend.
Documents obtained under the Official Information Act show the Exclusive Brethren church told the Chief Electoral Officer it wanted to spend $1.2 million to support National.
It wanted to know how to do that without compromising National's spending limit.
Helen Clark's move yesterday follows her threat last week to attack National's substantial base of anonymous funding by making all party political donations of above $250 declarable. The present limit is $10,000.
"We are at a turning point in New Zealand politics," she said.
"We are at a turning point as to whether we want wealthy interests to drive a bulldozer through the spending limits on election campaigns, or whether we are going to let wealthy interests dictate the outcome."
In a draft finding, the Auditor-General has said that most parties illegally spent taxpayers' money in last year's election campaign.
Under present law, advertising in support of parties requires the authorisation of the party, and must be counted as part of its election spending. That was the case with union support for Labour.
But advertising which attacks parties is not limited by the Electoral Act, and does not have to be counted as an expense.
The Exclusive Brethren pamphlets were issued in the names of individuals, not the church. But during the campaign, seven businessmen involved identified themselves as church members.
Helen Clark yesterday depicted that campaign as the church and National "driving a bulldozer" through the intent and spirit of the Electoral Act, which imposed spending caps to prevent big money manipulating campaigns.
She also said National's billboard campaign - which fell largely outside the three-month period in which the meter runs on election expenses - also contravened the intent of the law.
Labour strategist and front-bencher Pete Hodgson earlier told the Herald that the proposed law would restrict the amount outside groups could spend.
National deputy leader Gerry Brownlee last night said he rejected any suggestion that his party had colluded with the Exclusive Brethren.
"That is wrong and it is most offensive.
"The Exclusive Brethren have been a thorn in our side. They exercised the democratic right they have under the current law, but they have not done that in collusion with us or with any particular sanction from us."
Mr Brownlee said National was willing to look at the proposed legislation.
The Exclusive Brethren have complained to the Human Rights Commission about criticism of them in Parliament, which has included senior Cabinet minister Trevor Mallard referring to members as "chinless scarf-wearers".
Helen Clark rejected the suggestion her party was indulging in "hate speech".
Asked about Mr Mallard's threats to expose details of MPs' private lives, the Prime Minister said: "I'm thinking of asking the Minister of Police for a Taser gun for Trevor."
Exclusive Brethren representatives could not be contacted last night.