The Government has been criticised for spending millions of dollars on 34 BMW limousines at a time when it is telling people to tighten their belts.

The limos for ministers and VIPs, which cost about $200,000 each, will replace the current fleet, which is three years old. The Government is understood to be getting a discount.

A Department of Internal Affairs spokesman said the new limousines were bought under the terms of a deal signed by Labour in 2007.

It included a clause stipulating replacement with new vehicles after three years. That contract expires after another three years and the Crown will go back to the open market for its next fleet.

Mr Key said today it was a six-year deal signed in 2007 with a three-year rollout.

The Department of Internal Affairs made the decision, Mr Key said. That was signed off by the previous government.

"So it's not a situation where we as a government have decided to do that [to upgrade the cars]"

He said he had been advised that sending the cars back would be more expensive than ending the deal.

He said he found out about the deal last week while talking to one of his drivers.

Finance Minister Bill English last night told One News: "We could go out and buy second-hand cars but one way or another, cars need to be maintained and you have to renew them eventually."

But Green Party co-leader Metiria Turei said the purchase sent the wrong message.

"When everyone else is having to tighten their belts and John Key is cutting staff, creating unemployment in order to apparently tighten the belt of Government, this kind of spending is an outrage."

Dog and Lemon Guide editor Clive Matthew Wilson said the vehicles were "a relic of the age before the finance sector crash" and he noted the Government could have bought Lexus vehicles "for half the price".

Labour replaced the old Ford Fairlane and Holden Statesman fleet with BMW 730Ld cars from April 2008. They were estimated to cost about $90,000 each - well below their retail price of $170,000.

The purchase was criticised by the Green Party and mocked by National members, including now Prime Minister John Key.

National MPs said the luxury vehicles were a sign the Labour Government had lost touch with ordinary New Zealanders.

* The Government has bought 34 new Seven Series BMW limos.
* They cost $200,000 each; the Government gets a discount.
* The current BMW fleet is three years old.