National has done a turnaround on the sale of major strategic assets and is pledging a tougher New Zealand ownership test to replace the Government's 11th hour Auckland airport clause.

The surprise shift in position suggests a National government would not allow overseas buyers to invest in strategic New Zealand assets if that tipped foreign ownership over 50 per cent.

That appears to be a tougher test than exists at present under the Overseas Investment Act - which requires scrutiny of overseas investments only when a buyer is seeking a stake of more than 25 per cent.

It follows National leader John Key taking a hammering from the Government over his reluctance to spell out his position earlier in the week on the Government's decision to rush through rule changes effectively blocking a Canadian pension fund's bid for a 40 per cent stake in Auckland airport.

Mr Key said yesterday that National would repeal the Government's new regulation and replace it with its own, making it clear that for strategic assets majority ownership has to be held in New Zealand hands.

Asked whether that reflected traditional National Party thinking, Mr Key said: "I think this whole area of strategic assets is globally something that's new and something that people are starting to reflect on ... when strategic assets are involved I think it's correct for governments to consider their future and vulnerability."

But he repeated his criticism of the timing of the Government's Auckland airport announcement, accusing it of being politically motivated and undermining New Zealand's reputation among foreign investors.

Mr Key came under repeated fire from the Government yesterday, however, with Finance Minister Michael Cullen accusing him of being slippery over the Auckland airport deal.

In a separate development, confusion surrounded a "clarification" due to be printed in an APN newspaper today about earlier reported comments by Mr Key that he would "love to see wages drop", which Mr Key disputed.

Labour has used the report to attack Mr Key over industrial relations.

The paper that printed the comments, the Bay Report, a community newspaper owned by publisher APN, told readers last week that it stood by the report.

But Mr Key revealed yesterday that the Bay Report would be printing a retraction, which he said had been "communicated to him" by APN chief executive Martin Simons.

APN's general manager of Northern Publishing, Tony Verdon, said there would be no retraction, though the paper would be printing a clarification of Mr Key's comments.

Mr Verdon said yesterday that the Bay Report now accepted that the impression given by the story was incorrect.

- © Fairfax NZ News