Key Points:

New Zealand's children's health camps face a funding crisis which may force the closure of those at Roxburgh, in Central Otago, and either Rotorua or Otaki.

The camps' chief executive, Dr Fiona Inkpen, has told Social Development Minister Ruth Dyson that the camps "will no longer exist in their current form" unless they can fill a $5 million shortfall before a board meeting next Thursday.

Talks with Social Development Ministry officials have resulted in an increase of only 3.4 per cent, or about $414,000, to the camps' existing $12.2 million annual contract with the ministry - well short of the $5 million required.

"At this stage, given your officials' response, the board will announce the closure of Roxburgh and that it will not proceed with vital redevelopments at Otaki and Rotorua," Dr Inkpen told Ms Dyson in a letter dated October 9.

"At the time we will make it clear this postponement is the first step towards the likely closure of either Otaki or Rotorua ... "

The camps are among the country's oldest social services, dating to 1919. Since 1929 they have been part-funded by annual NZ Post health stamps.

Last year, the seven camps worked with 2719 children, most of them with behavioural problems.

The foundation which runs the camps employs 350 people - about 45 at each camp plus fieldworkers who work with families in their homes.

Dr Inkpen said the camps were a crucial early intervention for children who were at risk of "sad life outcomes" such as addictions, mental health problems or crime.

In recent years, health stamps have raised only a 10c surcharge for the camps, and have been barely noticed by the public.

Their contribution to the camps has dwindled from a peak of $158,000 in 1996 to $35,000 last year.

The camps' main source of money has always been taxpayers.

The foundation has survived by selling three-quarters of its Pakuranga camp site, making a net $13 million gain four years ago.

But its board has decided not to sell its remaining stock investments of $7 million because it would lose $1.5 million at current share prices.

National Party welfare spokeswoman Judith Collins, who was briefed by the foundation last Friday, pledged that she would find more money for the camps by cutting other Social Development spending.

The Social Development Ministry's general manager of family and community services, Marti Eller, said the ministry recognised health camps as an "essential service" and was committed to funding them fully "over the next three to four years" under the Pathways to Partnership programme.

The programme, announced by Prime Minister Helen Clark in February, will double funding to essential social services to $396 million a year by 2011.

But Ms Eller said only a $51 million increase was available in this financial year and priority was being given to "smaller essential services currently being funded at a lower level".

She said the foundation had been considering the closure of its Roxburgh and Otaki camps anyway because of their remote locations and ageing facilities.

Dr Inkpen said the two camps had been earmarked for closure eventually, but only as part of a long-term plan to move those facilities closer to Dunedin and Wellington.

HELPING HAND

* Health camps started in 1919 to aid malnourished children.
* First permanent camp established at Otaki in 1932.
* Now seven camps at Whangarei, Pakuranga, Rotorua, Gisborne, Otaki, Christchurch and Roxburgh.
* Camps now deal mainly with emotional and behavioural problems, and encourage parents to stay with their children for part of their five weeks in residence.