Prime Minister John Key has warned Fiji's self-appointed government the expulsion of New Zealand's acting high commissioner from Fiji would trigger retaliatory action.
Acting High Commissioner Caroline McDonald remains in Fiji after the latest reported threats to expel her went unfulfilled.
A senior Fiji government official said at the weekend Ms McDonald would be sent home yesterday. But she was not.
The threats to expel Ms McDonald come as self-appointed Prime Minister Voreqe (Frank) Bainimarama becomes increasingly irritated with travel sanctions on members of his government and the military and their families.
The Fijilive website was now reporting there was no official timing for her expulsion.
Cdre Bainimarama's permanent secretary Parmesh Chand said "when the time is right, we will be issuing a statement to that effect".
Cdre Bainimarama told the New Zealand Government last week Ms McDonald would be ordered to leave Fiji unless a visa was granted to George Nacewa, the son of a senior official in Suva, so he could finish his studies at Massey University.
Foreign Minister Murray McCully told Cdre Bainimarama on Tuesday the visa would not be granted, and then explained his government's position in a phone call.
Mr Key today said the ball was in "Bainimarama's court", but hinted an expulsion would likely trigger tit-for-tat action by New Zealand.
"We've made it very clear we would not want to see our acting High Commissioner sent home and if she is there will be repercussions," he said on Newstalk ZB.
"I don't think that would be in Fiji's best interests. We are trying to build a productive relationship with them, it's not like we are being unreasonable," he said.
"Let's see how it goes, but we are not going to operate in an environment where we won't stand up for what we believe in and what we believe in is that Fiji needs to get on to a roadmap of democratically held elections."
NZPA understands if Ms McDonald is sent home the Government will consider expelling Fiji's High Commissioner in Wellington, Ponsami Chetty.
George Nacewa previously studied in New Zealand, but was banned from entering the country under the Government's post-coup ban on visas for top members of the ruling military and their families.
The previous High Commissioner, Michael Green, was expelled in June 2007 and the latest move is being seen as a sign of a further deterioration in the relationship between the two countries.
Mr Nacewa's father, Rupeni Nacewa, is the official secretary to the president and has held the post since the previous government was in power, Fijilive reported.
The daughter of permanent secretary for health Lepani Waqatakirewa was also caught with visa problems. She was also a tertiary student in New Zealand.