Judith Collins' decision to suspend Ngapari Nui's voluntary work in Whanganui Prison could have far-reaching consequences, crime and justice spokesman Kim Workman says.

"There is growing anger from iwi leaders about this whole thing and it's likely to escalate well beyond the prisons, I think."

Mr Nui was appointed by South Taranaki's Ngāti Ruanui iwi to the role of kaiwhakamana at the prison, helping prisoners both inside prison and after their release. He has been in the role for five years.

Last week Corrections Minister Judith Collins was told he is still a member of the Black Power gang. She said that conflicted with his prison work and stood him down.

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Mr Nui was appointed because he had standing in the South Taranaki community, having been the chairman of Ngāti Ruanui. His gang affiliations were declared when he started.

But Corrections chief executive Ray Smith said he could not carry on the work now that he has said he is a patched member.

"A person working to use their experiences of gangs to discourage others from prospecting or taking part in gang activities can be effective. However it is my view the person must have first ceased their affiliation," he said.

The department is now reviewing others in the role, and future applicants will be "given greater guidance around declaring conflicts of interest".

Mr Workman said Mrs Collins had drawn an artificial line between gang membership and non gang membership.

"Renouncing your membership in a club doesn't mean that you cease to have connections."

Plenty of people had gang affiliations, had committed no crime for decades and did good work. They should be judged on their record and reputation, not whether they belonged to a gang.

He wondered whether this new "policy of exclusion" would apply to police as well. Mrs Collins is also the Police Minister.

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"(Police) often have close networking and positive relationships with gang members who actually help them and have a huge role in preventing crime and disorder through their influence within the gang communities."

Excluding gang members was also contrary to Government's social investment policy, and it denied gang members a chance to help out and be part of society. It might also have the effect of putting off other volunteers.

Dame Tariana Turia said Mrs Collins' decision was high-handed and bowed to the prejudice of a pressure group - in this case the Sensible Sentencing Trust.

Whanganui MP Chester Borrows said he had known Mr Nui for 30 years and he was an asset to the prison. He doesn't agree with Mrs Collins' decision, but said it was hers to make.

He has met with Mr Nui and iwi leaders in South Taranaki, and lots of people have got in touch with him over the matter.