The Government is expected to make an embarrassing backdown on its plans to dramatically restructure the Ministry of Foreign Affairs and Trade, with leaked Cabinet papers showing it will make just half of the $24 million in savings it originally planned.

Documents leaked to Labour foreign affairs spokesman Phil Goff showed a reworked plan for the ministry would cut 146 jobs, down from 304.

The expected savings are now $12 million, little more than the cost of the $9 million restructuring.

The ministry originally aimed to save $40 million, with $24 million in savings coming from the restructuring. Mr Goff said he had further information which showed $3.3 million would be spent on consultants in the next year to implement the changes.


Foreign Affairs Minister Murray McCully did not respond to requests for comment last night.

An official said no final decision had been made and the ministry would announce its plans next week.

MP Chris Finlayson, speaking in Parliament on Mr McCully's behalf, said: "It is no secret that there has been criticism of the change proposals, and the minister expects that there will be revisions."

The papers are expected to go before the Cabinet next week and show 53 foreign policy or diplomatic roles will be cut, of which 39 were senior positions and 93 back-office roles. The ministry has also backed down on proposals to cut the allowances of diplomats serving overseas, such as spousal allowances.

The proposal to make staff reapply for another job after returning from an overseas post will also be scrapped if the draft documents are correct.

Mr Goff said that despite the apparent u-turn on these controversial changes, significant damage had already been done. He had also been leaked documents from trade negotiation staff which showed the restructuring had dented staff confidence.

"They put out these big proposals that absolutely turned the ministry on its head, disillusioned people and now they've backed down on a significant number of those big proposals.

"They still have to make cuts in a way that will damage the foreign service but actually they've already damaged it because a lot of the people I've talked to have said they are going."

The leaked documents say the Stockholm Embassy will close next month and embassies in Madrid and the Hague will be shut later. Posts in Warsaw, Vienna and Rome will be downsized, and some property in Paris will be sold.

The backdown follows a revolt by senior diplomats after the proposals were first outlined by ministry head John Allen.

Diplomats wrote a letter warning of the consequences to New Zealand's work on the international stage if the changes went ahead, and were subsequently flown back to Wellington for two days of talks about the changes.