Christchurch Mayor Bob Parker today accepted Gerry Brownlee's apology for calling him a clown.
Mr Parker, who is in China promoting the quake-hit city, said the Earthquake Recovery Minister had phoned him to apologise.
"Naturally, I have accepted his apology. We are all working under considerable pressure at this time," Mr Parker said.
"However, the Government and council has a process of engagement on a number of fronts and I'm sure this will continue."
Mt Brownlee called Mr Parker a clown in reaction to the mayor's statement last week that the Canterbury Earthquake Recovery Authrority could force the city to increase rates or sell assets to pay for the earthquake recovery.
Mr Brownlee said he was furious at Mr Parker's comments and was a "clown" for making the remark.
He dismissed Mr Parker's assertion, saying the CERA Act specifically forbids such a move.
Section 48, clause 3 of the act states the minister "must not direct any council to (a) set a rate under section 23 of the Local Government (Rating) Act 2003".
Mr Brownlee described Mr Parker's comments as an "outrageous abdication" of his responsibilities and he was sick and tired of the scrapping between city councillors.
Yesterday, he told Radio New Zealand the "clown" comment was taken out of context.
"In the context that I made that comment, I was making another comment about the general performance of the council over the most difficult period that they had a couple of weeks ago.
"I think that they are under considerable pressure to deliver all sorts of services, but it is plain and obvious that it is going to be difficult for them to do so. They do have to work with us. That doesn't mean that they just stump up and put a bill in front of us - they have to work with us."
Mr Brownlee revealed the council asked him to exempt the council-owned Orion from monopoly controls, so power bills could be increased under earthquake emergency laws.
He said he has never said rates must be increased or assets sold to meet council costs.
"The Government is spending a lot of money we've been trying our best to move things on, it's undeniable we've had a Christchurch City Council that has not performed as well as it could - so my comments came at the time we were into reasonably significant negotiations with them over how we were going to help with the huge call that they are going to have on their resources going forward."