A Tuvaluan overstayer has been given a lifeline by Immigration Minister Lianne Dalziel, allowing him to stay in New Zealand for kidney dialysis treatment.

But the case has prompted a warning from Prime Minister Helen Clark that overstayers should not see New Zealand as an easy option for expensive medical treatment.

Last night, Ms Dalziel granted the 30-year-old man a two-year temporary work permit so that he could continue to receive dialysis at Auckland Hospital.

Doctors said he would die within weeks without it.

The Weekend Herald revealed that Government-paid dialysis for the man was due to stop today because he was ineligible for treatment under a new cost-cutting directive from the Ministry of Health.

Ms Dalziel said she had decided to intervene because the patient was eligible for residency on the grounds that he had married a New Zealand citizen in 2001 and had a 1-month-old New Zealand-born child.

The decision has delighted the man and his family and has also been welcomed by the Auckland District Health Board.

Lawyer Gowri Asiriah, who had sought a temporary permit to allow the man to continue treatment and seek permanent residency, said last night the family were over the moon and could now get on with their lives.

"They are probably going to have a celebration dinner. They are really excited that this has finally come to an end. He can be with his wife and family and get the treatment he needs."

The man has been living in New Zealand since his three-month visitor's permit ran out in 1998 and has been working illegally for the past five years.

Ms Dalziel said the man had been advised by Associate Immigration Minister Damien O'Connor last year to apply for a temporary permit so that he could then seek permanent residency.

But it appeared he did not receive the advice and thought his plea for help had been turned down.

The immigration Removal Review Authority had also turned down his appeal for a "stay of execution" last year but it had not known about his marriage to a New Zealand woman.

"It's all very well for us to quibble over why he didn't do that [seek a temporary permit] but it would seem rather unfair given the fact he is facing a death sentence tomorrow if we don't intervene at this point," said Ms Dalziel.

The man, who was first treated in an outpatient renal clinic last year and started dialysis last month, had been treated as a special case and should not be seen as setting a precedent, she said.

At a post-Cabinet press conference, Helen Clark said that while individual circumstances sometimes warranted special consideration, taxpayers could not be expected to pick up long-term medical costs for people who chose to overstay.

"Were it to be known that by overstaying in New Zealand you could receive, courtesy of the New Zealand taxpayer, for the rest of your life, expensive treatment, then we would be placing New Zealand and our taxpayers and our people waiting for treatments like this in a very difficult position," she said.

Guidelines introduced in December instruct hospitals to limit ongoing kidney dialysis to New Zealand residents and citizens.

Foreign patients who need urgent treatment will receive it, but once stabilised will be asked to find alternative care.

It costs about $600,000 a year to treat overseas dialysis patients, mostly Pacific Islanders.

Health board chief executive Graeme Edmond said the decision was great news for the patient and his family and provided an opportunity for the issues surrounding the case to be fully debated.

"The public needs to fully understand the conflict between saving a human being's life whatever his immigration status and the impact on New Zealand residents who cannot then get access to the health services they need."

Mr Edmond said that before the announcement the board made the decision to continue the treatment for a number of reasons, including the fact that the patient's immigration status appeared unresolved and the possibility of the Tuvaluan Government's contributing some of the cost.

The board had also received further advice from its expert ethics committee.

"One point needs to be made: if there were not the uncertainties that surrounded this particular case then the Auckland District Health Board would certainly have been following the ministry guidelines and stopping treatment."

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