The Government is unlikely to ban wheel clamping outright but is taking a bill to Cabinet which would regulate the industry, says Consumer Affairs Minister Kris Faafoi.
The most likely option for regulation was introducing a cap on the amount a private parking enforcement company could demand from a motorist who has had their wheel clamped.
His comments follow Transport Minister Phil Twyford saying he thought wheel clampers were "bottom feeders" and personally wanted the practice made illegal.
"It is time to change the law and either ban wheel clamping or regulate it," Twyford told Stuff.
A spokeswoman for Twyford declined to comment when asked by the Herald.
Currently there is no limit to what someone can charge for removing a clamp from the wheel of a car parked on private property, as the industry is regulated only by a voluntary code of conduct.
• READ MORE: Cowboy clampers lying in wait to clamp wheels in seconds
• READ MORE: Clamped twice in one hour: Auckland woman stung with $300 in fees
• READ MORE: Clamped while in the car: Auckland motorists crying foul at clampers' fees
In October last year, police were powerless to intervene when a couple was charged $760 by a Ponsonby antiques shop owner to remove a clamp.
"When people are being asked for hundreds of dollars instantly or they won't get their car that's when people are getting understandably angry," Faafoi said.
The Minister said he was conscious of fine tuning the balance between the rights of property owners and motorists, and was therefore unlikely to call for a total ban of the controversial practice.
"We're still doing the final work of getting the balance right."
Officials were looking to recommend several options, including capping the amount a motorist could be charged.
Faafoi said that was his preferred option, and other recommendations would address how to enforce it.
Those options were being finalised now and will then taken to cabinet to be signed off.
"We're close to having something that I think will be a rather pragmatic solution to the problem that keeps on eventuating."
Private parking enforcement is currently regulated by a voluntary code, drawn up by industry stakeholders including the Automobile Association and Consumer NZ in 2015.
Both the AA and Consumer have since called for it to be banned outright.
At the time, it was reported the code would help the industry self-regulate and all but eliminate the practice.
As well as allowing a 10-minute grace period, the code states clamping should only be used as a last resort and staff must not use threatening language or behaviour.
Wheel clamping is not illegal on private property in New Zealand, however, the code said breach notices should be issued in the first instance.
Towing should only be used if the car was taking up reserved space or creating a hazard.
Clamping was deemed appropriate only when towing was not a practical option.
The AA's Mark Stockdale said today the organisation had been calling for a ban for a long time - "or, at the very least, for the private parking sector including enforcement providers to be regulated".
"We would welcome any signals that the Government is looking at any sort of regulations of wheel clamping.
"It'd be great if those regulations were a ban, but even if they were required to meet similar standards as the tow truck industry that would be a start."