Russell Coutts could receive a knighthood following today's announcement. Photo / AP

Russell Coutts could receive a knighthood following today's announcement. Photo / AP

The titles of Dames and Knights are to be restored to the New Zealand honours system, Prime Minister John Key announced today.

In 2000 the then Labour government dropped titles from the top levels of the honours system, but from June they will be restored to them both - Knight and Dame Grand Companion (GNZM) and Knight and Dame Companion (KNZM/DNZM).

These titles will replace the appointment of Principal and Distinguished Companion of the order which were instituted in May 2000.

Some complained that the decision was part of the move to republicanism and others were unhappy that it made difficult for people to understand what titles had been awarded.

Mr Key said it was his pleasure to return to titles that would recognise service given to New Zealand.

"This is about celebrating success," Mr Key said.

He believed people had found it confusing not to have titles

"Roughly every year about six or seven New Zealanders are selected and given a very high honour to recognise and celebrate success."

The 85 New Zealanders who were given honours which used to come with a title will now be given the opportunity to accept the title of Knight or Dame.

"The Queen has given approval for the reinstatement of titles. The changes will be finalised and come into effect in time for the Queen's Birthday Honours list in June," Mr Key said.

They will have until June 2009 to decide whether they want to accept the title.

Amongst those who can take up the new titles are; Lloyd Geering, Ngatata Love, Eddie Durie, Peter Gluckman, Colin Meads, Stephen Tindall, Margaret Shields and Jenny Shipley.

Another person who will be offered the title of Dame is former attorney-general and speaker Margaret Wilson, who helped scrap the titles.

Mr Key said he had no views whether people should accept or reject the title.

He felt the decision was the best way of New Zealand having its own unique honours system.

He stood by his belief that New Zealand would one day become a republic, but his Government would be taking no active steps toward it.