The Government didn't want to pay David Bain compensation partly because of pressure from Police, former Canadian Supreme Court Justice Ian Binnie says.
Binnie has been critical of the Government's handling of the case since his 2012 recommendation that Bain had met the threshold for compensation was rejected by then Justice Minister Judith Collins.
In an interview with TVNZ's Sunday programme, Binnie said after meeting with Collins about his report he left New Zealand feeling as though he had been "mugged".
"I didn't feel crushed. But I felt if she could have, she would have."
Binnie said he now viewed the whole process as a "stitch-up".
"I was entirely clear that she was not going to accept the report...the only question was how she would figure out a way of getting rid of it," Binnie told Sunday.
"I think the Government was bound and determined not to pay compensation. I think the Police exert a very powerful influence, particularly on Collins, who I gather had previously been the Minister of Police. And I think the issue was not the money, I think the issue was the stigma - they did not want to relieve David Bain of the stigma of being a serial murderer."
Collins told the programme that she stood by all her statements and actions on the matter, and refuted Binnie's allegations. Collins referred to the findings of the Fisher report on the Bain case, and subsequent investigation by Justice Minister Amy Adams.
Collins ordered a peer review of the 2012 Binnie report by QC Robert Fisher, who found that Binnie had made several errors of law.
Bain's legal team sought a judicial review of Collins' handling of the claim, which was later discontinued after a confidential settlement.
After Adams took over the justice portfolio, she launched a fresh inquiry, led by retired judge Ian Callinan. In August, Adams announced that Callinan had found that Bain was not innocent "on the balance of probabilities".
In an unusual move, the Government agreed to make an ex gratia payment to Bain in the interests of bringing closure to the long-running claim. A full and final payment of $925,000 was accepted by Bain's team.
Bain was convicted of murdering his parents and three siblings in June 1994. He served 13 years in prison before the Privy Council quashed his convictions and he was acquitted in a retrial in 2009.
Long fight for compensation:
• May 1995: David Bain convicted of killing five family members in Dunedin.
• June 2009: Conviction quashed in a retrial after Privy Council appeal.
• Nov 2011: Canadian judge Ian Binnie investigates compensation issue.
• Aug 2012: Binnie concludes Bain should be compensated. Justice Minister Judith Collins seeks a peer review from Robert Fisher QC.
• Dec 2012: Fisher review says Justice Binnie's report was inaccurate and cannot be used.
• July 2013: Bain's legal team seek judicial review of Collins' handling of compensation claim.
• Sep 2014: Amy Adams is made Justice Minister.
• Jan 2015: Judicial review discontinued after confidential settlement between Govt and Bain's team.
• Feb 2015: Adams confirms the compensation process will start afresh, with all previous advice put aside.
• Feb 2016: Herald reveals new report has found Bain is not "innocent beyond reasonable doubt".
• August, 2016: Govt reveals compensation decision.