Finance Minister Michael Cullen has delivered a blunt message to Auckland's political leaders to pick up more of the region's transport tab with heftier rates rises.

He expressed irritation at a meeting with the Auckland Mayoral Forum at a proposed 5 per cent annual cap on regional rates rises over 10 years.

One official at the closed-door Beehive meeting said Dr Cullen told the mayoral delegation, led by Auckland City Mayor Dick Hubbard and joined by regional council chairman Mike Lee, that "putting rates up 5 per cent is not enough".

Dr Cullen is also understood to have indicated a preference for buses over rail to get Auckland moving.

"He said the future lies with roads and buses - that rail will never work," said an official. A second source claimed the minister was "rough" on the Aucklanders.

Last week's meeting, which Dr Cullen called to discuss new funding sources for Auckland's transport needs, was also attended by Prime Minister Helen Clark, new Transport Minister Annette King and Auckland Issues Minister Judith Tizard.

But they left the tough talking to Dr Cullen, who also queried the use of Auckland Regional Holding funds to secure full ownership of the port company.

Regional councillors planning a 4.9 per cent rates rise this year have painful memories of a citizens' rebellion against an average 34 per increase in 2003 which unseated several former colleagues.

They say it would take politically suicidal 17 per cent rates rises over 10 years to fill the $710 million public transport funding gap.

But the Government is concerned the regional council may be expecting a "bailout" similar to the $1.6 billion 10-year package of extra transport funding it promised in 2003, much of which is going on new state highways rather than public transport.

Dr Cullen is also known to be irked that Auckland Regional Holdings, a council subsidiary, is holding back revenue from the ports company and other assets for future transport operating needs rather than contributing more to infrastructure development.

He is understood to have in the past compared Auckland unfavourably with Wellington in the contest for contributions to rail upgrading projects.

Wellington is gaining a 75 per cent Government subsidy for a $370 million rail upgrade over 10 years, but is lifting regional rates by 6.32 per cent this year and intends raising train fares by 15 per cent in July.

Although the Government has indicated it will contribute $780 million to Auckland's rail upgrade, this compares with a regional council share of $1.1 billion, leaving a shortfall of more than $700 million.

Dr Cullen has previously listed priorities for Auckland's rail network for the next three years as completing the $200 million western line duplication project, upgrading the Newmarket junction and building a 1.8km spur line to central Manukau.

In a letter in December, he and former Transport Minister David Parker said electrifying the network was not an immediate priority, even though that is favoured by the Auckland Regional Transport Authority.

Although that agency was set up under the regional council at the Government's behest, Dr Cullen is keen to assert the Beehive's right to dictate terms of the rail upgrade through its own organisation, Ontrack.

He is understood to have been unenthusiastic last week about a compromise pitch from the regional council to electrify only the western line in time for the 2011 Rugby World Cup.

Dr Cullen was unavailable for comment yesterday and neither Mr Hubbard nor Mr Lee would discuss the confidential meeting.