There are differences of opinion over what led the Greens to cancel part of their memorandum of understanding with National on energy efficiency policy.

The memorandum (MOU), signed in April, allowed for the Greens to work with ministers in developing policy on energy efficiency, home insulation and the regulation of natural health products.

The Greens are also working with the Government on the national cycleway.

Energy spokeswoman Jeanette Fitzsimons said she was not advised or consulted about plans to scrap the Energy Efficiency and Conservation Strategy and stop work on vehicle fuel efficiency standards.

The Greens felt the moves were a backward step, but there had been no consultation even after Prime Minister John Key was made aware of the issue.

Pulling out of the memorandum on energy efficiency would allow the Greens to criticise Government policy.

Mr Key said he rejected Ms Fitzsimons' suggestion that the Greens had not been consulted on policy.

"It's not that we didn't consult with them, but we don't agree with each other on what the right movement is.

"Because we think actually the changes to energy efficiency standards for cars will pose significant costs on New Zealand at a time when they can't afford it and we don't actually think it will improve the emissions profile because we think New Zealanders will stop buying new cars," Mr Key said.

"They made it clear in terms of energy efficiency that they no longer want that to be part of the MOU. We are totally accepting of that, the MOU covers a number of other areas, home insulation, the cycleway, therapeutic goods ... At the end of the day we have a philosophical difference of opinion in terms of that particular issue."

Mr Key said National was still working with the Greens in other areas covered by the memorandum and would continue to do so.

- NZPA