An expert panel set up at Prime Minister Jacinda Ardern's urging has recommended a 3 per cent pay rise for nurses to avoid a winter strike.

The union representing 27,000 public sector nurses says that does not go far enough, and it wants an improved offer from the district health boards next week.

The independent panel was set up last month to break the impasse between nurses and their employers, at Ardern's suggestion.

It today recommended the slightly higher pay increase than the 2 per cent offer which was rejected last month, plus a $2000 lump sum payment.

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NZ Nurses Organisation (NZNO) industrial services manager Cee Payne said the recommendations on pay fell short of addressing the union's concerns.

Members would want to see a "significantly improved" offer from DHBs which addressed core issues of staffing, pay and working conditions, she said.

Payne said the panel's recommendations around staffing were positive.

It recommended that DHBs receive additional funding to ensure they had capacity in the nursing workforce to deliver services.

"This is a significant recommendation and not seen previously for nursing and midwifery," Payne said.

The last pay offer by DHBs in April was 2 per cent over two years and a lump sum of $1050.

If the NZ Nurses Organisation (NZNO) does not accept the offer next week, a winter strike is likely.

NZNO has said that it would prefer to settle with DHBs than to strike. But it says its members are dealing with an ageing and increasingly sick population, and staff are stretched because of a decade of underfunding of the health system.

In a rare move, the union began a month-long secret ballot of its members on strike action on April 23.

Any pay increase will likely require more funding from the Government. Last week's Budget included contingency funding for health sector pay rises.

There was also $100m over four years to lift community midwives' pay.

The independent panel comprises former Whanganui District Health Board chief executive Julie Patterson, former Reserve Bank director Professor Margaret Wilson and former NZNO chief executive Geoff Annals.