Prime Minister John Key encouraged Solid Energy's failed expansion plans, the Greens say.

Co-leader Russel Norman said the Government also failed to provide adequate oversight of the beleagured state-owned energy company as it never provided a business case for its proposed multi-billion dollar lignite expansion to Treasury nor ministers.

"The shareholding ministers and Treasury's Crown Ownership Monitoring Unit are responsible for providing this oversight but they manifestly failed.

"But more than that, John Key was actively encouraging the expansion of Solid Energy's lignite plans,'' Norman said, citing a newspaper report that had Key saying Solid Energy was a growth company and "we want them to expand in areas like lignite".

Last week it was revealed the state-owned coal miner was in heavy debt and holding crisis talks with banks.

Yesterday Prime Minister John Key said the Government knew of Solid Energy's failed expansion plans in 2009 and turned down a $1 billion request for a capital injection.

He could not say how much Solid Energy's problems would reduce the expected $5-$7b take from the part-float of state-owned energy companies.

Estimates say the financial collapse of Solid Energy could knock $1b from that figure.

"Obviously a portion of it, but as we've always said it's over a 3-5 year period, and given we haven't actually started the process yet, hopefully we'll find out from the Supreme Court this week whether we can go ahead or not, there's still arguably plenty of room,'' Key said.

The Supreme Court is ruling on the Maori claim of water ownership.

Key did say the Government had known about Solid Energy's problems for "some time" suggesting they had been factored in to the original estimate.

"I certainly accept that any time in the foreseeable future, Solid Energy won't be part of the programme."

He would not say whether the Government would be prepared to push out the date for returning to surplus if it got less than expected from the sales.

Key also refused to say whether he would call a snap election if the Supreme Court ruled against the Government.

Finance Minister Bill English refused to concede the government will have to revise the $5-7b it hoped to raise from selling state-owned assets.

"It may make a difference but we've got to test the market. The $5-7b is the best estimate two or three years ago. It's a big range - allowing for the fact there could be unpredictable elements of these companies."

The extent of problems with Solid Energy was discovered in 2011 when a scoping study was conducted in preparation for the partial sell-off of state-owned energy companies.

Dispute refusing the funding request, Government knew of the "baby steps" Solid Energy was taking towards expansion.

Key publicly expressed support for its plans to enter the lignite market.

"Yes, we didn't stop them and we saw some potential in lignite," he said today.

It was "a bit fanciful" to suggest the Government should have sacked the board in 2009 when the company was arguably performing well, he said.

"On the face of it at least what it had was rising profits, it had a situation where its valuation was going up, it had bankers lending it money, and it had an investment stream that had been set in place by the previous Labour government."

And the Government continued to take dividends over that time.

Now Solid Energy is $389m in debt.

The scoping studies did not discover issues with any of the other state-owned energy companies up for partial sale.

It was ridiculous of Key to try and blame Labour for Solid Energy's problems and he needed to "man up", Labour leader David Shearer said.

Trevor Mallard, Labour MP and former state owned enterprises minister, said some of the diversification proved to be wrong but he could not take responsibility for the international coal price.

"Or for National Party members who were in charge of the area not to read their papers."

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