Immigration New Zealand has backed down and says it will be accepting all Silver Fern Visa applicants - including those who had been told their applications had been accepted in error.
Hundreds of would-be skilled migrants, approved under the scheme aimed at bringing young and skilled people to New Zealand had earlier received an apology for the "technical error'' and advised that they would receive a full refund.
Approximately 4,000 people were logged into the website to apply for the visa and 306 people went through the full application process, including payment, after the 300 quota had been filled last Friday.
"INZ has reviewed the circumstances and in an act of good faith will accept all applicants who completed the application process with confirmed payment,'' said service support general manager Rob Stevens.
"It is pleasing to see such large numbers of young, skilled migrants from all over the world wanting to come to New Zealand.''
Immigration Minister Nathan Guy had said he was disappointed that the fault occurred, and was demanding a report on how it happened.
All 630 applicants were emailed to inform them that they had "successfully submitted" their applications and that their payment had been accepted.
But within hours, a second email was sent out to hundreds that said: "We regret to advise you of a technical fault ... and that your application was accepted in error."
Rejected applicants were told in that email to apply again "when the quota reopens about this time next year", and they would get a refund.
New Zealand Association for Migration and Investment director Katy Armstrong said the "mess-up" was not a good look for New Zealand. "Here we are trying to encourage more to use Immigration's online services, but what we have is an agency with an archaic computer system that cannot support it," Ms Armstrong said.
"It doesn't help our efforts in trying to get skilled migrants to come in."
Since its launch in 2010, the scheme has had its quota filled within 30 minutes when it became available every year.
Declined Malaysian applicant Andy Chew, an IT professional, said the computer error showed all the more why New Zealand needed migrants like him to lift the technology and skill levels in New Zealand.