The Prime Minister has slammed New Zealand First leader Winston Peters for holding out against plans to build two new office buildings for MPs in the parliamentary precinct which will cost at least $100 million.

"To be blunt, Winston is doing this purely for political reasons," Key said at his post-Cabinet press conference.

"He wants to go out there and claim we are wasting taxpayers' money."

The trouble was that Peters would not be telling the other side of the story which was that the alternative was to continue leasing Bowen House on Lambton Quay from foreign owners and "we'll end up paying more than if we build the building ourselves".

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Key said the two new buildings would be "millions and millions of dollars cheaper" than the lease but that would be after 30 to 40 years, he conceded.

"It just makes sense long term for us to own those premises. The economics support that view. We've got the space to do that.​"

New Zealand First has resisted all previous plans to expand the parliamentary complex with new buildings.

A plan to build a $94 million block on a park behind Parliament, formerly the site of Radio New Zealand House, was scuppered in 1997 by New Zealand First which dubbed it "the parliamentary palace".

Winston Peters. Photo / Christine McKay
Winston Peters. Photo / Christine McKay

A subsequent proposal to put the Beehive on wheels and move it to the park and extend Parliament House was also ditched.

Peters in 1996 wanted Parliament to take over the wooden building at the foot of Parliament grounds but that was given to Victoria University and now houses its law school.

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Govt plans $100 million expansion of parliamentary complex

28 Nov, 2016 4:30pm
Quick Read

Parliament Speaker David Carter unveiled the latest plans today.

The Government has approved the plan in principle and it has the support of all parties except for New Zealand First.

A new three-storey building for ministers will be built on the existing site of the parliamentary press gallery offices, in an annex next to the Beehive, and will be connected by a bridge to the Beehive.

Another five-storey building for MPs' offices will be built behind old Parliament House and be connected to the old building by a bridge.

The high-rise Bowen House on Lambton Quay, which is privately owned and leased for $6 million a year for MPs and ministers' offices, will not be used after 2022.

Peters is on a trade mission this week but New Zealand First deputy leader Ron Mark said that when New Zealand had over 40,000 homeless and young Kiwis were struggling to buy a new home, "this is not the time for wasteful expenditure pandering to the comfort of MPs and their staff."