Foreign Affairs Minister Murray McCully says some within the Ministry of Foreign Affairs and Trade are "intent on making a drama" out of its restructuring and has accused Labour of damaging staff morale and confidence.
A Cabinet paper prepared by McCully was leaked yesterday and confirmed decisions to scale back the number of job losses from 304 to 146.
It also referred to closing the New Zealand embassy in Stockholm by the end of June, followed by posts in the Netherlands and Spain.
The paper was leaked to Labour's foreign affairs spokesman Phil Goff who also made public a letter of warning from MFAT's trade negotiations division that proposed job losses had "undermined confidence, put real pressure on the retention of staff in their area and held up urgent priorities, such as the negotiation of the Trans Pacific [trade] Partnership".
A witch hunt is expected after the top level leak of sensitive details before it was seen by Cabinet ministers.
McCully said this morning the leak was a matter for the ministry's chief executive John Allen.
"It's information that will no doubt be causing him some concern and he has got my sympathy," he told Radio New Zealand.
"I'd certainly prefer to have the discussion which is taking place between the Government and the ministry directly with the ministry rather than through the news media."
The ministry had been "immune from change" for a long time.
"Clearly one or two people in it are intent on making a drama out of it. I'm intent on making sure the Government makes some good decisions."
Goff was himself "promoting the damage to the morale and confident of staff by leaking the material".
"That is exactly what his mission is and he needs to reflect on that."
The paper also suggested the jobs cuts would only save $12 million, not the $24m asked for by Government.
However, McCully said he believed the $24m savings would be reached as well as a $40m savings sought by Allen.
"Mr Allen wants up to $40 million so he can reinvest some of the money in modernisation projects in the ministry as he is entitled to do."
The restructure has already sparked a backlash among staff and hastened an exodus of top talent from its ministry.
McCully stressed that no final decisions had been made and the Government's expectation was that the restructuring would be managed in a way that retained "good people".
The leaked paper shows of the 146 positions, 53 would be in foreign policy and the other 93 cuts would be in corporate services.
The paper also refers to Allen's initial plans for global outsourcing, which has also been over-ruled by the minister.
The ministry would proceed with a 24/7 call centre operated from Wellington to deal with all inquiries that were previously handled at the local level by New Zealand Embassy staff.
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