The Government has publicly thanked lawyer and former Labour MP David Caygill for being willing to accept just $1500 a day for running the electricity pricing inquiry.

It has also confirmed that Tranz Rail chief Dr Francis Small will be paid $1200 a day for completing the Incis inquiry.

The Minister of Energy, Pete Hodgson, said he was grateful to those running the electricity inquiry "who have agreed to lower their normal private sector rates in response to the Government's desire for modesty in these matters."

The other two members of the electricity panel, Susan Wakefield and Stephen Kelly, would each receive $1000 a day.

Mr Hodgson said the $1500 a day was substantially less than Mr Caygill's standard charge-out rate as a partner in the law firm Buddle Findlay.

Mr Caygill would also cover his own travel costs between his home in Christchurch and Wellington.

"Because of Mr Caygill's role in the inquiry, Buddle Findlay faces a significant loss of potential income as it is unable, for conflict of interest reasons, to act for parties making submissions."

It has been reported that Mr Caygill's time was normally charged at $350 an hour but Mr Caygill would neither confirm nor deny that yesterday.

Dr Small's $1200 a day is an increase on the $1000 a day he was receiving when the inquiry started under National.

But the nature of the Incis inquiry changed this week. Dr Small is now in sole charge of a ministerial inquiry, scaled back from a three-person commission of inquiry.

The overall result would be savings, said the Minister of Justice, Phil Goff. The ministerial inquiry was expected to cost $201,000

The budget for the electricity inquiry was $850,000, Mr Hodgson said. Of that, $250,000 was from the existing energy budget and $600,000 was new funding.

National's state services spokesman, Roger Sowry, said Labour was guilty of the ultimate hypocrisy.

"Before the election, any payment the National Government made to anyone for anything was criticised as being outrageous."

Labour had said it was going to get rid of the "so-called culture of extravagance."

"Now they are paying money to old mates to do work that has already been done by the previous Government."

Mr Sowry said Mr Caygill was capable "and you do need to pay decent money to get the work done."

But he claimed that the work Mr Caygill was being paid to do had been completed by officials last year.

Mr Caygill is already the chairman of ACC, an appointment he accepted under National.

He said yesterday that he had been in politics long enough not to be surprised that such matters were of public interest.