Labour is calling for the Government to come clean over why Department of Labour charges against Pike River chief executive Peter Whittall were discharged last year preventing others from taking legal action over the disaster which claimed the lives of 29 men in 2010.
The widely criticised decision last December to drop charges against Mr Whittall, saw $3.41 million in insurance money earmarked for his defence paid out to the families of the dead men, but parties close to the matter denied that represented a deal to get him off the hook.
Labour's justice spokesman Andrew Little this morning said a letter from Mr Whittall's lawyer Stuart Grieve QC showed that a deal was offered last October, nearly two months before the former Department of Labour, now WorkSafe, went to court.
"There has been speculation about a backroom deal ever since the charges against Peter Whittall were dropped. Now this letter confirms those fears.
"What hasn't been explained is why the charges against Peter Whittall were discharged, not withdrawn, meaning he can never face any charge associated with the Pike River deaths."
Mr Little said the letter released to Labour under the Official Information Act had been altered for public release.
"My hunch is the original letter contains a lot more and sets out the real deal. We need to know what that was."
The letter released to Labour shows Mr Whittall's lawyer claimed he would have a good defence which would focus on the role of the Department of Labour's mine inspectors.
"It is also clear from the letter that the voluntary payment was only viable if the Ministry didn't proceed with the charges."
Mr Little said Worksafe had written to Labour stating there was no backroom deal between Mr Whittall's lawyers and those for the department, "although they admit the letter could lead to further suggestions there was one".
"However the deal offered by Peter Whittall's lawyer became a reality. This dodgy deal prevented the Pike River families seeing anyone held to account."
In the letter to Labour, Worksafe high hazards general manager Brett Murray says he was "aware that there have been wildly inaccurate allegations made by a number of people (and reported as "fact" by media and others) that there was some sort of "backroom deal" done between the defence and the prosecution which "let Mr Whittall off in return for these payments".
While he accepts that Mr Grieve's letter could lead to further suggestions of this kind, "I wish to make it very clear, again, that there was no such arrangement between the defence and prosecution".
Mr Murray states the offer of money "was a part, but only a part, of the Ministry's considerations about the status of the charges laid against Mr Whittall."
The critical issues in the decision were witness availability and "public interest considerations".
But Council of Trade Unions President Helen Kelly said the way the Crown dealt with Mr Grieve's letter should make all New Zealanders "seriously concerned".
"The letter makes clear that Mr Whittall's offer of payments to Pike River families was conditional on the Ministry of Business, Innovation and Employment agreeing that "no evidence would be offered" at Whittall's trial, thereby ensuring he was acquitted.
"The money was to be paid on that basis. It also makes plain that if the Crown proceeded with the charges, then alleged incompetency by MBIE in investigating the case would be a key defence strategy.
"There needs to be scrutiny of this decision both in order for the families of Pike to get some justice but also to reassure all New Zealanders that justice in this country cannot be bought." Ms Kelly said.
West Coast-Tasman MP Damien O'Connor, who said in December it appeared to be a stitch up, said today the letter confirmed his suspicions.
He said the department did not want to be exposed in court as "incompetent and arrogant'' and "in a large part responsible for the systemic failure at Pike River''.
The court processes would have exposed "incompetence at every level'', Mr O'Connor said.
Pike River families spokesman Bernie Monk said Mr Grieve's letter had not been distributed to all families yet, and as a result he could not comment.
However, widow Anna Osborne said it "reeked'' of a backroom deal.
She said families handed over bank account numbers last year expecting Government compensation, and instead the payment came through from Mr Whittall and the directors.
"If I had known the charges were going to be dropped and the deal was for Peter Whittall's insurance money, I would never have handed over my bank account number,'' Mrs Osborne said.
She said Mr Whittall had not lost a cent in the process because the insurers had done all the paying.
She understood that even if new evidence came forward now, Mr Whittall could not be charged again.
He could get on with his life "and we still don't have accountability''.