Labour believes the Government may be preparing to back down over paid parental leave after it asked to delay a bill extending the scheme to six months.
Labour MP Sue Moroney said she had agreed to delay reporting back her member's bill so National had time to consider its position on the bill.
The move followed talks between Labour finance spokesman David Parker and Finance Minister Bill English, the Labour MP said.
A spokeswoman for English said the Government had asked for an extension to consider changes before the bill was reported back to the House.
"The government administration committee has been working on substantial changes to Labour's paid parental leave bill with the aim of extending PPL in a way that does not prompt the Government to use its power of financial veto," she said.
"The Government hasn't yet had the opportunity to consider those changes so it asked for an extension before the bill is reported back to the House. That's been agreed."
The Government's position had not altered at this stage, however.
" As it said when the original bill was introduced, the government would like to consider extending PPL, when it's affordable."
Moroney's bill extends paid parental leave from 14 weeks to six months and National had previously threatened to use its power of financial veto to overturn the bill after a majority of MPs said they supported it.
Moroney said Labour had been approached by National after the "weight of public opinion" convinced them to rethink the financial veto.
"The Government's opposition has gone against strong public and Parliamentary support and I hope National will take this opportunity to give parents more precious time with their new babies."
The bill will now be reported back in February.
Moroney said she hoped National MPs would use the summer break with their families to reflect on how Labour's proposal would help mums and dads bond with their babies in the "crucial early months".
Should MPs be able to swear to uphold the principles of the Treaty?Related story: Oath wording strikes MP discord