Prime Minister John Key says compensation to schools to halt legal action over the Novopay system is a possibility, if the teacher unions would agree to a package.
The PPTA is considering legal action against the Education Secretary over the troubled school staffing pay system, and Mr Key said compensation to prevent that was possible if the PPTA agreed to a package.
He did not know what talks the acting Education Secretary Peter Hughes had held with the sector over the issue.
"I think there has been an attempt to compensate, or at least make whole, schools where there has been a cost. Some of these are subjective costs, so they are about a use of time where the argument is that a staff member has spent time resolving pay issues rather than something else and that's a more difficult thing to quantify."
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He said he had not obtained any legal advice on a potential legal suit, but said the PPTA was free to take the Government to court.
However, the Government is working hard to try to resolve the issues with the system.
"We acknowledge some schools - actually, a lot of schools - have had to spend more time than they otherwise would do resolving their pay issues and this has come at some inconvenience and potential cost to those schools."
He said the Government had already provided for schools to cover underpaid or unpaid staff and for those schools to be reimbursed by the Government.