Labour says a leading figure in the Government's $1.5 billion ultra-fast broadband project has a conflict of interest over his work for a Chinese company tipped by Prime Minister John Key as a possible participant in the plan.
Former Telecom chief technology officer Murray Milner was appointed as a director of Crown Fibre Holdings (CFH) when the company was established a year ago to oversee the Government's investment in high-speed broadband services.
Dr Milner has this year also been a consultant for Chinese telecommunications giant Huawei, which Mr Key said this year during a trip to China could be part of the ultra-fast broadband project.
Huawei, which supplies technology to mobile phone network 2Degrees, recently hosted an "ultra-fast broadband technology summit" in Auckland at which presenters included Minister for Communications and Information Technology Steven Joyce and Dr Milner.
CFH has said that as Huawei is not bidding for contracts in the ultra-fast broadband process Dr Milner has no conflict of interest.
It is considering bids from lines companies such as Vector as well as Telecom for dozens of regional contracts to install and operate regional broadband networks.
Officials said yesterday that the first contracts would be awarded soon, and work would begin before the end of the year.
But Labour yesterday produced a letter from CFH which outlines a process for the selection of suppliers of hundreds of millions dollars worth of technology and services to the companies that win the contracts.
Labour's telecommunications spokeswoman, Clare Curran, said the letter clearly indicated CFH would have significant influence in which technology suppliers were selected.
"It links Crown Fibre Holdings quite clearly to the tendering process for the technology" said Ms Curran.
As Huawei had been identified as a potential bidder, Dr Milner should stand aside from that selection process, said Ms Curran.
Responding to Ms Curran's questions in Parliament yesterday, Mr Joyce said the Government and Crown Fibre Holdings had followed "the utmost standards of probity" in the process for awarding the contracts.
Later, he told the Weekend Herald he was satisfied that the company had "robust and comprehensive procedures" on conflicts of interest.