A planned overhaul of the legal aid system will create a "massive bureaucracy" that will end up costing Government more money for a worse service, lawyers and industry regulators claim.

Justice Minister Simon Power this morning announced an array of changes to legal aid rules in a bid to avoid an expected $402 million cost blow-out over the next five years.

Among the changes will be:

* expanding the Public Defence Service (PDS) across the country to take on 50 per cent of criminal legal aid cases

* bringing in fixed prices for certain cases

* a user charge of $100 for family and civil cases, excluding domestic violence, mental health and criminal cases

* narrowing the criteria for legal aid in family cases

* introducing income testing for less serious criminal cases

New Zealand Law Society President Jonathan Temm said the changes amounted to nationalising legal aid.

Expanding the PDS would create a "massive bureaucracy", make the organisation less efficient and reduce the quality of its service, he said.

"How can the Government that is $16 billion in debt and looking to go further by using public money to finance private debt... How can they seriously turn around and nationalise the legal service with the public dollar?"

He cast doubt on the savings figures for the changes quoted by Mr Power, saying they were uncertain and possibly inaccurate.

"This is all magic by numbers. It's a very uncertain science. You get these people out here and have a look at the numbers because they wouldn't know if they were on fire.

"In five years when there's a different Government and a different complexion they'll look at this massive cost and privatise it again. It's just the pendulum swinging backward and forward."

Mr Temm said changes to the Waitangi Tribunal settlements process and moves to stamp out "overcharging" by police and Government departments would do more to reduce the cost of legal aid.

The Criminal Bar Association today released a statement saying it was "appalled" by the planned changes.

Expanding the Public Defence Service (PDS) would result in massive cost inefficiencies as the service expands out of its base in Auckland, Hamilton and Wellington into smaller centres, it said.

It claimed the service is already costing more money at $1612 per client compared to the $1343 charged on average by New Zealand lawyers.

Creating a national body to dominate legal aid services runs counter to the Government's political philosophy and moves to reduce the public service, the statement said.

"He is creating a monopolistic bureaucracy that will expand and become bloated."

The association also claimed problems would arise because clients would no longer have as much freedom to choose the lawyer they were granted under legal aid.

It accused Mr Power of manipulating his figures on the Government's spend on legal aid.

The real annual cost of the service was $164.5 million - not the "about $170 million" quoted, its statement said.

The changes announced today are a first step in overhauling the legal aid system, and are expected to save $138 million over four years.

At the moment a single person earning more than $22,000 a year or an adult with two dependants earning more than $50,934 are not eligible for legal aid for family or civil cases. This will be extended to cover less serious criminal cases.

Applicants above the threshold can still apply for legal aid, but will have to prove that their case is likely to be an expensive one, or that they cannot afford a lawyer.