Niwa chief scientist for atmosphere, Dr Murray Poulter, would not comment on the relationship between Metservice and Niwa.
Comments on blog site The New Zealand Weather Forum called for Niwa to apply for the Ministry of Transport funding. "If Niwa is smart they should apply for the ministry of transport contract later, once they have all the services laid out," said poster Tornado Tim.
"There would be no point in releasing these products to the public if they thought Metservice's products were enough."
Others called for the Government to set boundaries so taxpayers weren't paying twice.
Private forecaster WeatherWatch supported Niwa branching out from long range weather and climate research.
The organisation has a troubled relationship with Metservice which was made worse last year with a price increase of $30,000 for daily highs - forcing WeatherWatch to scrap the service.
"We have always had a good working relationship with NIWA and I am cautiously optimistic that a closer WeatherWatch and NIWA relationship is going to be a very positive change for the weather industry and the New Zealand public," said Philip Duncan from WeatherWatch.
"They are larger than MetService so I'd expect them to have the resources to really do the job well provided they work proactively with private industry.
"I don't think there should be two separate government forecasters competing in the same market, at the expense of private providers and, ultimately, the public."