NZTA officials claim Wellington City Council made threats over Island Bay's botched cycle way after "conveniently forgetting" the funding conditions to fix it.
The 1.7km cycle way, which was completed in 2016, has been the subject of court action, safety concerns, and budget blowouts.
The project that initially cost less than $2 million to build was unsuccessfully pitched as a $14m shovel-ready project earlier this year to fix.
A solution to remediate the cycle way was agreed to three years ago, yet nothing has been done to date.
In fact, emails released to the Herald under the Official Information Act reveal that as of early this year the council didn't even have a funding request or business case progressed with NZTA for the work.
The original agreement between the two organisations was that NZTA would fund a share of the cost to fix the Island Bay cycle way, but only after a wider Southern Connections route was built to connect it with the CBD through Newtown.
In March an NZTA official emailed her colleagues giving them a heads up the council recently had a "fraught" meeting over accelerating plans for the cycle way.
"They [have] no business case but are threatening to go to the minister saying NZTA should fund the cycle way in Island Bay," she said.
She pointed out the reason the original cycle way was fully paid for by the council and not eligible for Government money was because it didn't connect anywhere.
"WCC have conveniently forgotten that this was the other proviso of securing funding."
In June, further correspondence between NZTA officers accused Wellington City Council of pointing the finger at them for not agreeing to provide funding until the Southern Connections route had been built.
One of them suggested a cheaper option would be a similar design to Te Ara Mua Future Streets in Māngere Central.
"But could Andy push it through?", the email said.
Finding consensus on Island Bay cycle way would a be a difficult task for any mayor, let alone one who is getting a reputation for his inability to find numbers around the table.
By the time NZTA and city council staff met in August, emails show the Transport Agency's position on funding the solution to the Island Bay fiasco had changed.
NZTA said it would now consider the funding once a Southern Connections route had been agreed to, rather than waiting until it was built.
This change in position was put down to the amount of time that had elapsed and concerns about the council's social licence to build cycle ways.
But it appears this re-positioning was not crystal clear to councillors by the time they met on the issue at a Strategy and Policy committee in October.
Southern Ward councillor Laurie Foon successfully passed an amendment directing council officers to contact Waka Kotahi NZTA and seek funding for the Island Bay Parade upgrade as soon as possible.
"My patience is starting to be tested," she said.
Mayor Andy Foster was reluctant to go back to NZTA, as Foon's amendment proposed:
"We can ask; I think, frankly, we're whistling in the wind."
Almost a month later, a city design council officer sent a letter to NZTA.
But it appeared to be less direct than councillors intended, only asking the Transport Agency for a position on funding and an understanding of the funding pathway.
In a statement Waka Kotahi regional relationships director Emma Speight said funding for the cycle way would be considered within National Land Transport Fund funding availability.
She this would happen after the Southern Connections business case was completed and submitted to NZTA for endorsement.
Speight said that as a funding partner NZTA has highlighted the possibility of lower cost options for the Island Bay cycle way during the August meeting with council officers.
"Waka Kotahi expects this to be considered when WCC progresses the detailed design of the Island Bay cycle way, noting the public consultation on design options that has already been undertaken."
She said statements made during free and frank conversations between Waka Kotahi officials did not reflect any official position.
Southern Ward city councillor Fleur Fitzsimons said the cycle way needed to be resolved as soon as possible.
"The council has lost its social licence to build more cycle ways while Island Bay remains unresolved."