Islanders blame cage diving for series of close calls.
Footage has emerged of the terrifying moment a 6m great white shark lunged at a dinghy carrying an international film crew off Stewart Island.
Two people were on the inflatable craft filming for documentary Lair of the Megashark, which screened on Discovery Channel last year, when they had the frightening encounter.
A voice can be heard on the video saying: "I don't think this is such a brilliant f****** idea you know ... I don't think we can have a boat in there. I really don't."
Images from the footage have been posted online by a group that claims the shark-cage-diving industry is causing the predators to associate boats and humans with food.
They are attempting to get the practise banned - however, experts say it is unlikely to be the reason for increased great white shark activity.
Stories abound among locals of sharks bumping vessels, biting buoys and stealing their catch - behaviour they say wasn't present a decade ago.
"We've been attacked twice," fisherman Richard Squires said. "A shark came up and bit a buoy on the stern of the vessel, it came charging out of the water with its mouth open."
Squires is not a member of the protest group but also believes the sharks were comfortable around boats because of the cage-diving.
Last year the Department of Conservation (DoC) granted permits to two cage-diving operators - Shark Experience and Shark Dive New Zealand. Strict conditions include a ban on feeding the sharks and using decoys, controls on commercial filming and restricting the practice to Edwards Island, some 10km off the coast of Stewart Island.
Fiston Montagnat lives in New Caledonia but has been coming to Stewart Island since the 1960s when his father bought a house there.
He has had several encounters with sharks, including one in January close to Stewart Island.
New Zealand First MPs Clayton Mitchell and Winston Peters travelled to the island this week for a public meeting about the shark problem.
"We are calling on the Government to put a moratorium on this and actually do a comprehensive study on what the impact [of cage diving] is," Mitchell said.
"When you start bringing the sharks in close to your boat for the thrill-seekers, like any animal their behaviour becomes modified."
But DoC's director of conservation services for the southern South Island, Allan Munn, said it was "highly unlikely" shark diving had anything to do with increased great white activity.
"If we can be satisfied we've got sensible rules around it then why wouldn't we [approve shark diving]?" The permitting system meant cage diving was now far safer, and "sharks have been coming into the area since time immemorial".
Shark Experience boss Mike Haines referred inquiries to Shark Dive New Zealand, which said, "unfortunately we don't have anything further to add to the erroneous concerns raised by the Stewart Islanders".