Rioting inmates at Waikeria Prison have gained access to power tools, tactical equipment including shields and body armour, and have built makeshift weapons to use against Corrections staff.
The protesting inmates have also accessed a medical dispensary where controlled drugs are stored and there are now fears for the structural integrity of the badly damaged prison building.
Sixteen men have been holed up in a high-security building since Tuesday, when they lit several fires to protest against poor conditions.
The building has since been extensively damaged and the Department of Corrections said it was unlikely to be used again.
Corrections incident controller Jeanette Burns said the "prisoner disorder event" is continuing this evening. Negotiations are ongoing with 16 prisoners in the "top jail" facility.
She said the incident was contained within the facility's secure perimeter and there was no threat to public safety.
"The prisoners have continued to cause extensive damage to the facility, including forcibly accessing restricted areas including a room used to store tactical equipment that includes power tools, shields, batons and body armour.
"They have also constructed a number of makeshift weapons that we believe they are planning to use against staff, and accessed a medical dispensary where controlled drugs are stored.
"While the group state that they are protesting conditions at the prison and not rioting, their actions are clearly violent."
Burns said buildings within the facility were significantly damaged and officials now had concerns about their structural integrity.
"In addition, we know that there are tensions between the prisoners themselves which are likely to result in violence, evidenced by the assault carried out on the man who surrendered last night. We remain concerned that the men are putting themselves at significant risk by remaining where they are."
Yesterday the prisoners agreed with negotiators to surrender if they were able to speak with kaumātua. This was facilitated but did not resolve the situation, Burns said.
Later in the day the prisoners committed to surrendering if they could speak with Māori Party MP Rawiri Waititi. This was also facilitated and did not resolve the situation.
"We have negotiated in good faith, and prisoners have defaulted on the commitments that they have made."
Burns said Corrections had been approached by others who believed they could resolve the incident. Corrections had declined these approaches.
"This remains a highly volatile and dangerous situation, complicated by the damage to the facility and the access to weapons that the prisoners have.
"We are not prepared to compromise the safety of staff responding to the incident, and highly trained staff with specialist skills will continue to negotiate with the prisoners.
"The prisoners are aware that water will be provided to them on their surrender, along with further access to kaumātua. They have had multiple regular opportunities to comply with staff."
Burns said Corrections were providing support to about 200 prisoners who were evacuated from the top jail and transferred to other prison sites, and considering how else it could help them to maintain contact with their whānau and friends.
"Many have found the incident distressing, and are concerned about the impact of being transferred unexpectedly on their rehabilitation, employment and education progress."
Earlier, one of the men holed up at the prison told RNZ that Corrections needed to start telling the truth about what is really happening, and that the inmates would remain there "for as long as it takes".
Late yesterday afternoon, one of the inmates surrendered after he was assaulted by the others, who tried to prevent him from leaving.
Corrections says inmates continued to light fires and cause further damage last night.
But RNZ has been able to speak with one of the prisoners this afternoon, who has described the prison as "inhumane".
He said Corrections needed to start telling the truth and stop twisting the story for its own reputation.
"They say we are rioting, but we aren't," the man told RNZ.
"We are protesting for a cause and that's why we have gone this far.
"We will sit here for as long as it takes, we would die for this cause.
"Inside or outside the gate, we are all human and we want to be treated like that."
He said Corrections had been telling media they were concerned for the prisoners' health and safety.
"Well, if they are, why are they still letting us drink our own urine?"
The inmate told RNZ they want media to be able to go in there and speak to them directly.
"They keep saying it's unsafe for media to go in but why did they let kaumātua and Rawiri [Waititi] come in yesterday?"