Labour says Social Development Minister Paula Bennett has been caught in "a bare-faced lie" after denying she had cut funding for a 21-year study into Auckland children's development which was commissioned just three years ago by her department.

The "Growing Up In New Zealand" study, which is following the development of 7000 children in Auckland, South Auckland and the Waikato over their first 21 years, was commissioned by MSD in 2008 to provide up to date data to aid policy development.

It builds on the famous "longitudinal" study which followed 1037 babies born in Dunedin in the early seventies.

But Professor Iain Martin of the university's Medical and Health Sciences faculty yesterday confirmed the study was facing a serious funding shortfall.

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"We are grateful to the Government for the $25.9 million funding to date but without an ongoing commitment of funding it will be extremely difficult to continue the study in its current form."

"There is insufficient funding for the study from 1 July 2012 when the 7000 Growing Up in New Zealand children reach the age of two to three years. We need approximately $8 million from 1 July 2012 until 30 June 2014 to continue with the study".

Ms Bennett indicated she'd knocked back a recent request from the university for money to continue its work.

"Just of yesterday I got another request from them for another $5 million of taxpayers' money. I've got to say nearly $26 million spent on a longitudinal study that sounds like they've kind of got their fair share to be honest."

She later said the amount spent so far was $23.3 million.

However she there was never any ongoing funding allocated to the study in the first place either by her Government or Labour.

"In 2009 I managed to secure them some extra funding. In 2010 I managed to secure them another $6 million in funding.

"Labour promised them funding but it wasn't put aside for them."

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But Labour's deputy leader Annette King said that was "a bare faced lie"and provided Budget documents showing Labour had allocated funding for the study in the 2009/2010 and 2010/11 years which was subsequently missing from National's Budget documents.

"They have doctored the figures in their own Budget by leaving it out."

Ms King said the study's first report last year revealed a relatively high proportion of the children involved were born into families facing a range of problems such as inadequate housing, deprivation, alcohol and drugs.

"I suspect that might be the reason National don't want to fund it anymore. National don't like what's emerging from the study so rather than facing facts that we should all face in New Zealand, they're going to starve it of funding which will destroy the validity of it."

Meanwhile, Ms Bennett confirmed she'd told the University to seek funding from philanthropic sources to continue its work.

"They have a role to actually show the merits of the work they are doing, if it is as good as they keep telling us it is then they will actually have others that want to pay for some of kind of study."

Professor Martin said the university was working hard to secure funds from non-government sources and had also contributed substantial sums itself.