The Race Relations Commissioner says she will "keep an eye on" a student club which is using symbols also used by white supremacist groups.
The European Students Association has been established at Auckland University and has some fearing it's a white nationalist group.
The group will be included in next week's orientation week, despite objections from students. The university has allowed the group to hold a stall and recruit members at the Clubs Expo.
The group's Facebook page includes Celtic symbols used by white supremacist groups, and paintings depicting the unification of Germany and the colonisation of New Zealand in the 19th century.
It has also posted "our pride is our honour and loyalty", a statement similar to "my honour is called loyalty", a common translation of the Nazi SS slogan.
Race Relations Commissioner Dame Susan Devoy says she will keep an eye on the group.
"I am a Kiwi with European heritage and I'm very proud of my Irish roots - but being proud of my heritage doesn't mean limiting the rights of anyone else."
However the president of the club, who won't give his name for safety reasons, says the group has been misunderstood.
"We aren't Nazis, white supremacists, racists, fascists," he told NZME.
"We completely condemn all of that. We aren't any of that."
The man says Pacific, Maori and Asian students have cultural groups, and Europeans have the right to have their own cultural group as well.
He says the group aims to recruit both "European students" and anyone else who is "interested in European culture".
The Auckland University Students' Association (AUSA) is disappointed the organisation will be allowed at the university's orientation, despite serious student concerns of racist material.
AUSA confirmed it has received complaints about the group and has met the University Proctor to relay those concerns.
But a university spokesperson said the university has no reason to prevent the group from taking part in the expo.
"The university promotes a safe and inclusive campus environment. We have no evidence there is any form of discrimination or racism."
AUSA president Will Matthews said students have contacted him with concerns about the views and purposes of the group.
"The rhetoric the group is using, some of the material being posted online by them, was indicative of groups that hold highly nationalistic and white pride objectives.
"We understand the importance of free speech, but that needs to be balanced with the importance of having a tolerant and open campus."
AUSA believe the group undermines the safety of students on campus.
The university spokesperson said the club would be allowed to participate in the expo, despite not being affiliated to AUSA like other clubs are.
"The AUSA affiliation process does not occur for a couple of weeks after semester starts.
"It is normal practice to allow new yet-to-be affiliated clubs to attend Clubs Expo, so they don't miss out on the opportunity to promote their club and sign up members.
He said four or five clubs participating in Expo are not yet affiliated.
Matthews said the group has not said or done anything overtly offensive, but it has also done nothing to reassure concerned students.
"If they feel concerned about the issues that have been raised by students, then I invite them to engage in a constructive and open dialogue about their objectives."
The group's Facebook page includes the tag line "strength through honour" and a post, "Our pride is our honour and loyalty".
More than 100 clubs are affiliated to AUSA, covering a broad range of interests and political positions.
In 2012, students voted not to disaffiliate ProLife, an anti-abortion group, after two people complained about it.
Every group has to have at least 10 members, including three officers.