Foreign Affairs Minister Murray McCully says an International Whaling Commission (IWC) proposal, which would allow hunting to continue in the Southern Ocean Whale Sanctuary, falls seriously short of providing a strong basis for a diplomatic solution.

"I personally think it's offensive," Mr McCully said.

"The catch limits proposed in the Southern Ocean are unrealistic. The proposal to include fin whales in the Southern Ocean is inflammatory. New Zealanders will not accept this."

He said New Zealand's ultimate goal was to see an end to all whaling in the South Pacific.

Mr McCully will continue to work on a diplomatic solution and see if negotiations can be brought back on track.

However, he said the diplomatic process would be abandoned if it stopped being productive.

The IWC proposal would allow Japan, Norway and Iceland to continue commercial whaling for another decade, despite a global ban.

It claimed between 4000 and 18,000 whales could be saved over the next 10 years under the compromise proposal, which sets lower catch limits for all three whaling nations than the self-imposed quotas they have now.

There would be rigorous monitoring of whaling, and no other countries in the 88-nation commission would be allowed to start whaling operations during the 10-year plan.

The environmentally delicate Southern Ocean would be designated as a sanctuary, but whalers from Japan would still be allowed to take a number of the marine mammals from the seas around Antarctica.

The proposal will be decided on at the next IWC meeting in June.

"The proposal to include fin whales in the Southern Ocean is inflammatory. New Zealanders will not accept this," Mr McCully said.

"New Zealand has always said that the proposal must offer significant improvement over the status quo and that any proposal will be tested against our commitment to stop whaling in the Southern Ocean.

"This does not meet those tests."

At a protest in Wellington today, Greenpeace New Zealand executive director Bunny McDiarmid said the proposal was unacceptable.

The Government needed to start negotiations with other anti-whaling countries to see if they could broker a better deal, she said.

"We need to see an end to whaling in the Southern Ocean Whale Sanctuary, it's not good enough to just reduce (it).

"If the IWC is going to stick together and come out with some future there's going to have to be some compromises."

Greenpeace wanted to see an end to all commercial whaling because it had wiped out some whale species and brought others to the brink of extinction.

They would accept a phase-out approach ending with no commercial whaling.

The Green Party called on the Government to vote against the proposal.

The future of whales hangs "precariously" on the ability of campaigners over the next two months, MP Gareth Hughes said.

"This issue is dear to the hearts of New Zealanders and the public understand that they have the power to convince their Government to protect the whales."

Mr Hughes said if the proposal was accepted hundreds of whales would be slaughtered every year and would reward Japan for breaking existing international law.

"The IWC's so-called compromise risks undermining decades of consensus on protecting whales."