Plans for bilingual road signs at Rotorua's entrances will have to go back to the drawing board after the NZ Transport Agency ruled warning signs need to be in English.
But mayor Steve Chadwick said she was sure the city would go ahead with bilingual signs, though speed limits, which were included in the original plan, may need to be removed.
Rotorua Lakes Council had proposed signage at road entrances to the city with "Haere Mai Ki Rotorua", also declaring in English: "NZ's first bilingual city".
But the council was told by the NZTA at the end of March that under Land Transport Rule, Traffic Control Devices 2004, signs on a rural/urban threshold had to be in English.
"Schedule 1 provides for all regulatory and warning signs to be in English. As you can see the only wording acceptable on these signs is 'Welcome to [locality]".
Chadwick said the council had received the NZTA's response and "there was confusion".
However, she was assured by the NZTA on Sunday only speed signs were a problem under the current rules, and "they would sort through the issue together".
"We needed the clarity so that we can proceed as New Zealand's first bilingual city. I am very pleased now that it will get sorted, and we can work constructively."
When asked if she thought the NZTA's rules were narrow-minded, the mayor said no.
"We are just testing 'a first' or pushing the envelope. Hopefully, it will mean they take another look at these policies for all of New Zealand."
NZTA director of safety and environment Harry Wilson said the issue "specifically relates to the sign needing to serve as an effective and legally enforceable speed-limit warning sign".
"The current regulations already permit guide signs, tourist signs and general interest signs to be bilingual. The Transport Agency has previously communicated this to Rotorua Lakes Council."
Wilson said the agency respected and valued the importance of te reo Maori as an official language.
"While the current traffic regulations would not permit the combined speed limit/welcome sign proposed for Rotorua in its current form, we are working with Rotorua Lakes Council to develop and trial a bilingual entrance sign which will help to promote Rotorua as a bilingual city.
"The bilingual speed limit gateway sign format could then be incorporated into traffic regulations to become a standard option for other councils to adopt."
An NZTA spokesman added that one of the issues being worked through was the proposed sign included too many words and could be distracting for motorists.
A former Minister for Maori development, Te Ururoa Flavell, put the idea of a bilingual city to the council in October 2016 and pushed for te reo road signs.
He said he never thought it would be an issue.
"The NZTA's stance has come as a surprise considering there is already a welcome sign in te reo with a speed limit at Lake Rotoiti. One would have thought they would have raised the issue a hell of a lot earlier."
In response, an NZTA spokesman said the Lake Rotoiti sign's location in a rural setting meant it did not come under the specific rule preventing the Rotorua sign.
Flavell said that if the agency was willing to change the rules "it should be just a simple formality with a stroke of a pen".
Rotorua officially became the first bilingual city in New Zealand in August last year.
Te Tatau o Te Arawa led the initiative with support from the council and Te Puni Kokiri.
Councillors unanimously supported the idea.