The Government is signalling a more cautious approach to its controversial convention centre talks with casino company SkyCity after previously saying it could sign a deal in spite of an ongoing investigation by the Auditor General.

The Government faced accusations of arrogance from Labour after saying negotiations with SkyCity over the pokies-for-national convention centre proposal would continue and could even be concluded even though aspects of the deal were to be investigated in an inquiry initiated by the Auditor-General on Wednesday.

Economic Development Minister Steven Joyce said he would be "not at all concerned" about signing a deal with SkyCity even with the inquiry in progress.

But Prime Minister John Key appeared to shift his Government's position with a strong indication that while talks would continue, a deal would not be completed until the Auditor General's work was finished.


"I don't see any reason that we can't continue negotiations. Obviously we'd be pretty cautious about signing a deal."

Mr Key repeated his view that the inquiry was welcome because it would clear his involvement in the deal which had drawn slurs from the Opposition.

Mr Key has acknowledged that he indicated during meetings with SkyCity before the tender process began that the gambling law concessions the company had been seeking for some years would be on the table if it submitted a bid to build the centre.

SkyCity's tender to build the centre won out over rival offers with Mr Key saying the casino operator's offer to foot the entire $350 million bill, in return for those concessions, meant the centre would cost the taxpayer nothing.

He cited rival bidders who lost out to SkyCity in the tender who were quoted in the Herald yesterday saying they felt the process was good.

Facing questions from Green Party co-leader Metiria Turei in the House, Mr Joyce said the there was no certainty any deal would be done before the inquiry was concluded or at all.

In any case, signing a deal was not the end of the matter as legislative changes would likely be required .

"So there's plenty of opportunity to look at things on the way through plenty of water to flow under the bridge."


Mr Joyce downplayed any difference between what he'd said earlier this week and the Prime Minister's position yesterday.

"I can't quite see the distinction the member tries to make" he said in reply to Ms Turei.

Meanwhile Mr Key and Mr Joyce tried to turn the heat back onto Labour saying with Mr Key saying the opposition party's attacks demonstrated "a high degree of hypocrisy" given they were in power when SkyCity was granted permission to expand its Auckland casino.

"In 2001 Labour did virtually exactly the same deal agreed to 230 extra pokie machines or a number equivalent to that for a convention centre, there's nothing terribly new with this concept."

However Labour dismissed that attack during Question Time pointing out that deal was handled by the Casino Control Authority not the Government and required no law change. They pointed out the deal was signed off by the authority's chairperson at the time - National's current Justice Minister Judith Collins.