The government's flagship plan to combat global warming is hanging by a thread as National withdraws support for the Emissions Trading Scheme.
In a policy announcement on Sunday morning, leader John Key has revealed the party will not be supporting the scheme in its current form.
Key says National will not support the ETS unless it is fiscally neutral and closely aligned with that being put forward by the Australian government later this year.
"As a responsible international citizen, New Zealand must do its best to reduce greenhouse gas emissions. A well-designed, carefully-balanced ETS is the best tool available for efficiently reducing emissions across the economy," he says.
Key says the government is cutting corners and risking people's financial security in order to reach a political deadline for the ETS.
"National is not prepared to cut those corners - not when the financial security of Kiwis is at risk, and not when getting this wrong means exporting jobs, ratcheting up inflation, and viciously squeezing household budgets.
Key acknowledges that means emissions trading legislation may be held over until the next parliament.
The first vote on the legislation passed with a massive majority - only Act's two MPs voting against it.
But now National wants it delayed, support for the bill is crumbling.
Labour is likely to get support from United Future and New Zealand First but the Green Party is frustrated over the deferment of the transport component of the scheme. The Greens believe it is no time to back down on petrol charges, particularly with traffic-choked roads.
Votes are also less likely to come from the Maori Party which claims Labour is backtracking is a case of political manoeuvring and ad-hoc policy.
The Green Party says Key's approach to climate change policy lacks urgency. Co-leader Jeanette Fitzsimons says National has no action plan on the "worst environmental threat faced by humanity".
"Instead he wants to slow down and criticise everyone else," Fitzsimons says.
With its own MPs and Jim Anderton, Labour has 50 votes in support of the legislation.
But National's 48 MPs will now vote no, along with Act and Gordon Copeland, making 51 votes in opposition.
"We've known we can never rely on National. This just proves the point despite this being an issue that you'd think people would rise above petty politics for," says Climate Change Minister David Parker.
Earlier this month the government gave key industries more time to adjust to the cost of their carbon emissions. In 11th hour changes to the bill it said it would delay the introduction of a new petrol charge that would have added eight cents to every litre in 2009. The change is being pushed back to 2011.
, which is
due to be phased in next year, is designed to help combat global
warming by creating an incentive for businesses and households to
make decisions that are good for the environment, rather than those
which create greenhouse gas emissions.
Since the scheme's announcement, it has been criticised for putting the burden of climate change on consumers and small businesses while giving sectors like agriculture a five year grace period within which to comply.
Greenpeace says National's move is a strong indication the party puts big business backers ahead of tackling climate change.
"National appears to lack the courage to vote on climate change legislation prior to the election," Greenpeace climate campaigner Simon Boxer says.
"It seems National is caving in to big business against the
wishes of the overwhelming majority of New Zealanders who want
action on climate change."