The Government is to scrap the building watchdog accused of being too slow to address the leaky homes crisis.
The Building Industry Authority (BIA) would have its functions moved into a government department when the new Building Act came into force, Commerce Minister Lianne Dalziel said.
Moving its functions into a governmentdepartment would improve accountability, Ms Dalziel said.
Internal Affairs Minister George Hawkins had lashed BIA officials over the crisis, saying they failed to keep him informed.
The changes were announced two weeks after Parliament's government administration committee released a damning report on the BIA, a crown entity run by a government-appointed board.
That report, and a wide-ranging inquiry into leaky homes released the same day, said the BIA was slow to detect and report on the rotting house problem.
The committee said the building industry needed an overhaul to ensure homes were built properly.
One of its 63 recommendations was a complete and urgent revamp of the Building Act.
That legislation was expected to be introduced to Parliament by the end of July.
"The public reasonably expects the government to address the regulatory failure highlighted by recent weathertightness problems, but the arm's length relationship between ministers and a crown entity means that we as a government, have had little direct influence," Ms Dalziel told the Public Sector Governance and Accountability Conference.
"A departmental structure will strengthen the accountability of the regulatory body to the responsible minister, and in turn strengthen accountability to the public."
It was another step in reforming the building sector, Ms Dalziel said.
She said she had confidence in the BIA.
"The decision does not reflect on the performance of the authority members," she said.
"I am very impressed with the way the authority has responded to the challenges it currently faces, and I expect it to work closely with all members over the next few months on designing the departmental model."
Some authority members were likely to join a reference group to provide advice on the new regulatory system, she said.
BIA chief executive Bill Porteous last month resigned , saying criticisms of him over the crisis were "neither just nor appropriate".
BIA chairman Barry Brown defended Dr Porteous, saying he had been subjected to a "number of unwarranted attacks".
