The Government has slashed funding to prosecute crime by around $4 million, Attorney-General Chris Finlayson has revealed.

Most criminal offences are prosecuted by Crown solicitors, who work for private firms but are funded from Crown Law using taxpayers money.

In the May, Budget the Government cut funding by $11m. But cabinet has agreed to a one-off allocation of $4m from the government's new Justice Sector Fund, a pooling of agencies' resources.  An extra $3 million unspent last year will be carried over which takes the cut down to $4m.

Finlayson told MPs on Parliament's law and order select committee today that the service must be ''financially sustainable without quality being compromised.'' He called it the ''oldest PPP [public private partnership] in the history of the country''.

Crown Law officials said the cost of the network has increased by 60 per cent in the last 5-6 years - but the volume of cases is only two per cent higher. They also pointed to regional variations in costs.

Last year the Government ordered independent reviewer John Spencer to examine the prosecution services which cost the taxpayer around $75m a year. He recommended changes in how Crown Law oversees the network which the agency is now working through.

Spencer criticised the ''honesty process'' whereby Crown solicitors bill the Government for their time  - but provide little break-down of the costs. He also pointed to a ''development of monopolies".

"These have the potential to create a situation where the purchaser needs the provider more than the provider needs the purchaser. This power imbalance can prove costly in the long run,'' he said.

There are 16 "warrants" for Crown solicitors which are granted indefinitely and not put out for tender like other government contracts.

Labour MP Charles Chauvel argued that cases are becoming more complex and therefore more expensive - pointing the Urewera trial and Kim Dotcom case in Auckland.

Finlayson told him: ''You are absolutely correct, there have been a lot of legal changes in the last couple years and as the Criminal Procedure Act reforms are rolled out we will have to keep a very close eye on developments ... at least some crime has become more complex.

''That's why…we've had to adopt a more rigorous approach.''

Crown Law is also working to reduce its accommodation costs - its third largest outlay, Finlayson revealed.

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