Workers at the Tiwai Point aluminium smelter believe they are being used as political pawns by smelter management in electricity contract negotiations with Meridian Energy.

Yesterday, workers at the smelter confirmed management told them Meridian had walked out on talks.

"The general feeling among workers is the message was deliberate in order to get more community involvement and definitely to get more political involvement and use it as leverage," one worker said.

The worker said his colleagues knew any decision to close the smelter was out of their hands but felt the announcement was scaremongering in order to try and "freeze" electricity prices.

Workers said the atmosphere at the smelter was not harmonious and they believed management was playing one employee against the other, with looming redundancies.

"Some workers are stressed out and sweating about everything, while others would be happy to see the end of the place".

"Many of us [workers] believe we are being used as political pawns by management," the source said.

Meridian bosses have denied walking out on talks.

Meridian Energy chief executive Mark Binns said although talks were confidential he could confirm the company was still engaged in discussions.

The company was waiting on smelter owners to get back to Meridian, he said.

"We left things with Rio Tinto when we last met. Both sides exchanged views and put forward our positions and they left to consider theirs. I got the impression they would get back to us."

He had still not heard from smelter bosses about what they had decided, Mr Binns said.

New Zealand Aluminium Smelters acting general manager Stewart Hamilton issued a statement on behalf of general manager Ryan Cavanagh, who had gone on holiday.

"NZAS is continuing to talk with all stakeholders. This includes our power supplier, Meridian Energy. Our focus remains on trying to do everything we can to return NZAS to viability. Our suppliers are starting to understand the gravity of the situation," he said.

"We believe it is in everyone's interest to complete our negotiations at the earliest possible opportunity".

Mr Hamilton hesitated when asked why smelter management had told workers that Meridian had walked away from talks.

He did not want to discuss what the workers were told.

Mr Hamilton said he was not involved with the staff announcement but he understood that workers had been told both parties had gone away to consider their position.

The Engineering, Printing and Manufacturing Union have dismissed the smelter management's public denials.

Southland organiser Trevor Hobbs said workers at Tiwai confirmed they were briefed by company management on Thursday that Meridian Energy had walked out of negotiations over the power price.

Invercargill MP Eric Roy said he was holding information about the negotiations that he did not want to make public.

" . . . What I will say is it is not beneficial for me to say anything at this time except talks are ongoing and far from being over."

He refused to comment on whether the announcement had put pressure on the Government to intervene.

Prime Minister John Key said yesterday that he understood negotiations between Meridian and Tiwai were ongoing.

- © Fairfax NZ News