United Future and the Maori Party have teamed up to block the Government's major reforms of the Resource Management Act.
The two parties said this morning they could not support the latest changes to the Act and had written to Environment Minister Amy Adams with their concerns.
Government needed either United Future or the Maori Party's support to get the legislation over the line.
United Future leader Peter Dunne and Maori co-leader Tariana Turia said the amendments to the RMA went much further than rebalancing the legislation to streamline consents.
"We say the changes to remove emphasis on the 'maintenance and enhancement of the quality of the environment' fundamentally rewrite the Act and put a spanner in the works of the legal system, that will take years of litigation to fix up," they said in a joint statement this morning.
Mr Dunne said that in the 20 years since the RMA was created, the environment was in a worse state by nearly every measure, and government's proposals to facilitate development would make matters worse.
"I do not accept that commercial interests should override the environmental principles of the Resource Management Act."
He added: "While we both agree that there could be useful improvements made in tidying up the process issues within the legislation, the changes to Part Two will create a level of uncertainty which will be counter-productive."
Mrs Turia said the legislation was designed to ensure that New Zealand's resources were sustainable, and the second round of reforms undermined the whole purpose of the Act.
The statement indicated that they were open to negotiation on their support for the reforms, but could they could not back the legislation in its current form.