Hundreds of drivers have had their licenses cancelled after a fraudulent licensing scam was uncovered; revealing staff had accepted bribes of up to $600 in exchange for a licence.

In some cases, fake documents were passed on to driver licence agency staff in order to approve a licence, while other instances revealed a testing officer would park up during a practical test before passing the so-called driver on the spot.

The revelations follow an investigation carried out by the NZ Transport Agency and police after complaints from the public. The information was revealed in documents obtained by Radio New Zealand under the Official Information Act.

Documents show up to 350 drivers have had their licences cancelled or have been called in to re-sit tests.

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Complaints from members of the public included an allegation that a person could receive a licence by paying between $500 and $600. For that much, a testing officer would park up for the duration of the test and then pass the applicant.

There was also a complaint made alleging people could obtain a heavy vehicle licence by paying up to $3000. Normally, applicants for that licence class would have to go through each driving class - from a class 2 to 3 or 4, and then from class 4 to 5.

Among the documents released included a briefing note to then Minister of Transport, Simon Bridges, in April, 2016.

It showed authorities had a concern that there had been a marked increase in the number of Indian licences, with figures increasing 11-fold in two years; from 70 in 2013 to 772 licences in 2015.

Three men involved in the scam now face police charges. It is understood they worked in driver licensing agency roles in customer service, administering driver licences and data entry.

Lobby group Road Transport Forum NZ, the national body representing the commercial road freight industry, said the allegations that licensing officers had been bribed to fake tests was not only a let-down for the system, but potentially very dangerous on the roads.

Chief executive Ken Shirley said: "The reliability of our licensing system has been eroded and there is an understandable distrust in the integrity of the institutions that administer it.

"A driver with a licence obtained through fraudulent means lets everybody down and is a danger to themselves and other road users."

He said regulatory authorities had an obligation to make sure third-party providers were closely monitored and that future contracts with them were based on the quality of its delivery or service.

"Corruption has no place in New Zealand and in this case, as well as being unfair to the thousands of people legitimately moving through the license system, it has created an incredibly dangerous situation for other road users."