Prime Minister John Key has pledged his officials will investigate "money for mates" allegations surrounding fees given to environmental consultants.

Former environment minister Nick Smith gave $180,000 of taxpayer cash to fund meetings to resolve disputes between farmers and environmentalists clashing over projects in the Mackenzie Basin and Waitaki Valley.

The Mackenzie Sustainable Futures Trust was set up to help resolve the disputes.

Documents issued under the Official Information Act reveal senior environment ministry officials had serious concerns about the project, and declined an application for a $200,000 grant earlier this year. However, Dr Smith overuled the decision and the group got another $80,000.

More than half the cash went to environmental consultants - including about $88,000 to Ecologic, a firm run by Dr Smith's friend Guy Salmon. Mr Salmon is also linked to the National Party ginger group the BlueGreens.

Mr Key said yesterday that Dr Smith was trying to mediate between the groups and had called in "some tried and trusted people".

He added: "I'm sure someone will have a cursory look at it . . . Maybe the minister's office or my office . . . I don't see it as a terribly big issue but I'll reserve the judgment to go and have a look at it."

Environment Ministry chief executive Paul Reynolds has met new Environment Minister Amy Adams to raise his concerns.

Labour environment spokesman Grant Robertson said there were serious questions to answer.

"This project was highly political. For goodness sake, the trust was launched at a conference for the Blue Greens . . . the Government must clarify how the trust came to be funded. At the moment the public are being left with the all too familiar stench of National Party cronyism."

Environment Ministry emails reveal officials had reservations about the project. Deputy secretary at the time Sue Powell wrote in October: "We remain deeply concerned at the level of professional fees being paid into this process; some of the costs charged also have us concerned."

Environment Canterbury chief executive Bill Bayfield also had no truck with the initiative. The agency stumped up $5000 in October but he balked when asked for more cash. In January he wrote to the ministry: "God, these people are annoying. One of the reasons I was willing to underwrite their meeting before Christmas was to get them out of the way."

He worried the process conflicted with Canterbury's water management strategy, calling it a "silly and potentially confusing overlap in a small community".

The "collaborative process" was proposed as a way to bring together more than 20 interest groups clashing over water management.

A series of two-day meetings cost about $25,000 per event and officials worked out Mr Salmon was receiving three-quarters of that - about $18,000 per meeting.

Whanganui-based consultant Richard Thompson got 7 per cent of the total.

About 200 hours of Environment Ministry time was spent on the administration of funding.

Dr Smith said government policy was to move away from "a divisive approach through the courts" and it was appropriate for a minister to intervene.

Mr Salmon said his fees included travel, accommodation, research and preparation for the meetings.

Mr Thompson said the process had been "successful" and was less costly than resolving disputes through a court process.

"We are just trying to do a job."

WHERE CASH WENT

Ecologic consultant Guy Salmon: $88,010 (includes $682 in restaurant and bar charges)

Whanganui-based consultant Richard Thompson: $13,130 (includes $149 in restaurant and bar bills)

Environment Defence Society: $2256

Restaurant and bar charges for meeting participants (at May, June and August meetings): $5495

Production of report and interim report: $30,800

WHO PAID

Environment Ministry: $180,000

Mackenzie District Council: $5000

Waitaki District Council: $5000

Environment Canterbury: $10,000

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