Jenny Shipley was forced to apologise yesterday for saying Pacific Islanders climbed through people's windows at night.
In a concerted attack, Labour accused the Opposition leader of casting a racial slur.
Mrs Shipley's apology blunted National's own attack on Labour over its plan to sell a share ofthe electromagnetic spectrum to a Maori trust at a discount price.
In a heated speech on Tuesday about whether the plan would help Maori to "close the gaps," which include crime statistics, Mrs Shipley said: "Where's the 5 per cent discount for Pacific Island people if they are actually causing trouble as well.
"They climb in the windows of other New Zealanders at night. It's not only Maori."
After sustained criticism by Pacific Island Affairs Minister Mark Gosche and colleagues in the general debate, Mrs Shipley made a personal statement to the House:
"I made some comments, and if in any way they have caused offence to people inside or outside the House, then I am most certainly sorry for that.
"But I wish to make it clear, as I did yesterday, that the assertion that somehow or other access to a discounted spectrum will close the gaps for Maori or Pacific Island people is simply not true."
When Mrs Shipley had made her comment during the snap debate, Labour's senior whip, Rick Barker, instantly objected and asked that she be made to apologise for "offensive" remarks.
But Deputy Speaker Geoff Braybrooke said he had not "taken it that way."
"It's a robust debate, and if we are pulled up for everything that people take offence at, I'm sure we would not get very far."
Before Mrs Shipley made her apology, Mr Gosche said Pacific Islanders were outraged and demanded that she explain what she meant.
Meanwhile, National's information technology spokesman, Maurice Williamson, yesterday complained to the Human Rights Commission that the spectrum deal discriminated against the Human Rights Act on the basis of race.
In his letter of complaint, he said the Government's decision discriminated against non-Maori New Zealanders.
The Coalition Government has endorsed the view that the spectrum deal is not part of a Treaty of Waitangi obligation.
But it will sell one of four third-generation cellular bands to a Maori trust for 5 per cent less than the average price fetched at auction by the other three.
The trust is likely to set up a joint venture with a telecommunications company.
