Labour says its opposition to the sale of the Crafar farms to a Chinese company is not racist.
Labour leader David Shearer claimed yesterday that Prime Minister John Key and Land Information Maurice Williamson have accused the party of being racist.
"I have been called much worse," Mr Shearer said.
What concerned him was that by implication, National was labelling every New Zealand opposed to the sale as anti-Chinese and possibly racist when what they opposed was "the sale of profitable New Zealand-owned assets to foreign interests."
In fact the Crafar farm companies were in financial distress and were placed in receivership by Westpac in October.
Mr Williamson approved a deal on Friday for their sale to Shanghai Pengxin, including management of the farms by state-owned Landcorp, for a sum thought to be over $200 million.
Asked for the source of National's accusations of racism, a spokeswoman for Mr Shearer gave no source for the claim against Mr Key but pointed to Mr Williamson's appearance on TVNZ's Close-Up on Friday as the source of his accusations of racism.
On the show Mr Williamson said that when Canadians, Americans, Germans and Swiss bought farmland there had not been a"mutter or a murmur."
"As soon as the word Chinese was mentioned, we are opposed to it. I have to say that is bordering more on racism than xenophobia."
He said that in 2006, a year when was in office, Labour sold 383,000 ha of land to foreigners when the Crafar package was 7000.
Mr Williamson said he was not saying most opponents of the sale were racist "but I didn't hear this level of protest when huge tracts of our land were being sold under the Labour Government."
According to the Overseas Investment Office gross land sales in 2006 amounted to 198,574 ha (the gross figure does not show up sales with a New Zealand partner in, for example a joint venture) and the net land area approved for sale was 225,007 ha.
The land area approved for sale to foreigners in the last three years of the Labour Government was 384,027ha, gross, or 225007 ha net.
Former Labour MP Brendon Burns issued a statement early last year headed "From Beijing to Bavaria they are buying our farms" expressing concern about farm sales in the South Island, including to German investors.
The 16 Crafar farms have a combined area of about 7,900 hectares.
In the last two years, 357,056 ha has been approved for sale of agricultural land to foreigners, with majority ownership by country as follows:
* United States - 25,306 hectares
* Britain - 22,600
* Switzerland - 9727 hectares
* Germany - 6834 hectares
* Australia - 3861 hectares
* Hong Kong - 759 hectares.