Key Points:

Jobs will be cut and programmes scrapped under a review that will shave more than a quarter off the Environment Ministry's budget.

Environment Minister Nick Smith said job cuts were inevitable if the ministry was to keep within its 2009-10 budget of $56 million set by Labour - down from $75 million in the 2008-09 year.

Dr Smith said it was too early to know how many jobs would go or which programmes would be cut. But spending priorities would include climate change, work on water issues and waste management.

"It's open knowledge that the Government is under enormous fiscal pressure," he said. "I'm working with the chief executive on a re-prioritising of where the new Government wants to see the focus.

"The previous Government has left a huge hole in the environment budget with the ministry facing massive cuts. The irony is that at the very time they were campaigning on sustainability their plans were to cut the ministry's budget by a third," he said.

Labour's environment spokeswoman Nanaia Mahuta said the Government was blaming Labour to divert attention from its own back-tracking.

"National has consistently said it would cap the public sector and that means no job losses. So for Nick Smith to say there will be job losses is at odds with what was promised."

Brenda Pilott, national secretary of government workers' union the Public Service Association, said ministry staff were already under pressure from a raft of complex changes to environment laws. She said salaries made up only about 35 per cent of the ministry's budget, and the union would be looking closely at the number of contractors that were used.

Considerable money would be saved from one-off projects that were coming to an end anyway, she said.

The Environment Ministry will be responsible for overseeing sweeping changes to the Resource Management Act - expected to be the biggest overhaul of environmental rules since the act was introduced in 1991.

The new structure is likely to include the first stages of an Environmental Protection Agency, a new body that will deal with applications for national projects, such as power stations.

Ministry chief executive Paul Reynolds said the aim of the review was to meet government priorities, such as waste minimisation and reforming the Resource Management Act, and to ensure the ministry could effectively lead environmental policy. He said implementing the new structure was likely to take several months.

The ministry is the Government's main adviser on environmental issues. It prepares five-yearly reports on the state of the environment that cover air quality, water quality, waste, energy, transport and other issues.

Programmes that are run by the ministry include the household sustainability programme for giving householders advice on how to reduce their environmental impact, a programme to increase recycling and one to make the public service carbon neutral.