Teina Pora is to seek a judicial review of the Government's decision not to take inflation into account in compensation paid to him for spending 21 years in jail for a rape and murder he did not commit.

Pora was paid $2.5 million in June with the Government agreeing to make the payment and allow Pora to consider challenging the inflation aspect in court.

His advocate, private investigator Tim McKinnel, confirmed to the Herald that Pora has decided to make the challenge and that papers are being prepared.

This comes after cabinet papers released under the Official Information Act showed that Justice Minister Amy Adams rejected advice that Pora's compensation package should include an inflation component.

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Earlier, newly released cabinet papers revealed that Justice Minister Amy Adams rejected advice that Teina Pora's compensation package be adjusted for inflation.

In June, the Government announced it was willing to pay Pora just over $2.5 million to compensate him for wrongful conviction and imprisonment.

Justice Rodney Hansen, who evaluated the compensation bid, recommended the payout be adjusted for inflation in his report.

However, Cabinet papers obtained under the Official Information Act show that advice was rejected by Adams, who said it wouldn't be appropriate as inflation indexing wasn't provided for when guidelines were put in place in 2000.

She also said the current compensation rate was generous compared to other jurisdictions and no other successful claimant had had their payments adjusted for inflation.