Prime Minister Jacinda Ardern has blasted the New Zealand Transport Agency, saying they "dropped the ball" in not executing its key regulatory function.

Yesterday, the agency's chief executive Fergus Gammie resigned.

He had been under fire since it was revealed that NZTA had not been carrying out its regulatory function properly, resulting in thousands of vehicles having to be retested for warrants of fitness.

Speaking to TVNZ this morning, Ardern said NZTA had some issues it needed to address.

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"It is fair to say a new board chair came in and discovered that over a number of years, NZTA had dropped the ball on one of their really important jobs, which was enforcement.

"Of course when you come in as a government, sometimes you discover things and there had been that erosion of that side of NZTA's business."

Ardern said the Government was in the process of fixing the issue.

Yesterday, a spokeswoman for Transport Minister Phil Twyford said Gammie's resignation was an operational issue and it would not be appropriate for him to comment.

But this morning, he told media Gammie had "done the right thing – he's in a very difficult situation".

He said the regulator failure was a major issue of public concern.

But he put the blame back onto the previous National Government.

"The organisational failure by NZTA in the execution of their regulatory responsibilities has been going on for the entire three terms of the last National Government."

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Twyford had announced law firm Meredith Connell would be reviewing NZTA's regulatory function.

Connell would also be running the regulatory division of NZTA to work through the open files that had been left.

"I have commissioned an external review by the Ministry of Transport of this entire episode so we can make the changes needed and give the public confidence in the safety of the land transport system."