Prime Minister John Key yesterday warned of other potential foreign buyers of large tracts of New Zealand farmland lining up behind the Hong Kong company bidding for the Crafar farms as his Government signalled a new focus on overseas investment rules.

Mr Key said he was "genuinely worried" about large foreign purchases of farmland.

"If we ended up in a position where New Zealanders are tenants in their own country, I can't see how that would be in New Zealand's best interests."

While there had been periods of increased overseas interest in New Zealand farms in the past, Mr Key said the issue deserved further scrutiny due to "the sheer scale of it" at present.

The Government had seen "evidence of large tracts of land potentially going into foreign holdings and not just one of them but multiple ones".

Earlier, Finance Minister Bill English said Hong Kong company Natural Dairy NZ's bid for the Crafar dairy farms had brought the issue into the public domain - "that's not the only potential that we see on the horizon".

The Government's concerns - shared by the Opposition, Federated Farmers and much of the public - have arisen as a long running review of the Overseas Investment Act nears completion. The review, which Mr English initially said was intended make foreign investment here easier, was to have been reported back last week, but has now been delayed.

Yesterday Mr English said the farm issue had come up relatively recently and officials working on the review were now "trying to get a handle on how big an issue that might be". He refused to say when the review would now be completed and released.

Labour associate finance spokesman David Parker said Mr Key was running "hot and cold" on the issue.

"Today he is saying that a review of the overseas investment regime is likely to stop the sell-off of large tracts of land to foreign buyers, and yet the review, initiated by Finance Minister Bill English in March last year, had the express aim of ensuring applications to the Overseas Investment Office could be approved more easily."

Mr Parker said Labour was opposed to loosening overseas investment rules "and is not convinced the sale of dairy farms to foreign owners is in New Zealand's interests".

Meanwhile, Green Party co-leader Russel Norman, whose private member's bill which would prevent overseas investors from buying large amounts of "sensitive" land was labelled "extreme" by Mr Key, said: "There are these huge sovereign funds - the Chinese have enormously deep pockets - who are very interested in productive agricultural land with access to water and they will always outbid us. The only way to deal with this is regulation."

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