Government officials today spoke with Kiwi "Dambusters" veteran Les Munro to reassure him that it "understood and respected" his motivation to sell his war medals, but it could still block the auction later this month.
Mr Munro, 95, is the last survivor of the pilots who took off for the attack on German dams, later immortalised in the film The Dam Busters.
One of only two New Zealanders to take part in the World War II raid, he has put his medals up for auction in the UK to raise money for the upkeep of the Bomber Command Memorial in London that commemorates his comrades who were killed.
London auction house Dix Noonan Webb said the medals could fetch 40,000-50,000 pounds (NZ$81,400-$101,700) at its March 25 auction.
The money will go to the Royal Air Force Benevolent Fund, guardian of the memorial at Green Park in London that commemorates all the 55,573 dead of Bomber Command, including 1679 New Zealanders.
The Ministry for Culture and Heritage is currently seeking expert advice on whether the medals are covered by the Protected Objects Act 1975, which would mean they required approval for export if sold to a non-New Zealand buyer.
David Butts, the ministry's manager of heritage operations, said officials spoke with Mr Munro today.
"We have talked to Mr Munro about the steps we are taking and will be keeping him fully informed," he said.
"Protected New Zealand objects are a valuable and significant part of our culture and heritage and it's our role to ensure this is considered before they go overseas."
Mr Butts said the situation will be clarified "well before" the auction.
RSA national president BJ Clark hoped that a deal could be done to keep the medals in New Zealand.
"It's a really difficult one. It's a significant part of New Zealand military history, but he was the person who carried out the history ... so, from a personal point of view, we certainly shouldn't dictate to him what we think should be done with the medals," he said.
"But maybe there's an opportunity for a dialogue and perhaps see if there's a way of him achieving his aims without New Zealand losing a significant piece of military history."
Andrew Grigg of Auckland auction house Cordy's believes there would be no shortage of willing buyers in New Zealand, including private collectors and the Government.
"Our New Zealand history is fairly short, so we need to protect our history and keep as much of it as we can here."
A spokesman for Sir Peter Jackson, who has been working on a remake of The Dam Busters since 2008, refused to comment on the sale, or whether the famous New Zealand film director would himself bid for the medals and being them back here.