The CTO job is too complex for one person, the Government has decided.

The Government has scrapped its plan to appoint a powerful individual to shape the country's digital future in the wake of the debacle over the appointment of a chief technology officer for the country earlier this year.

Government Digital Services Minister Megan Woods has instead recommended to the Cabinet that a small group of people should be appointed to fulfil the functions that would have been performed by a CTO.

Former communications minister Clare Curran resigned in September following a bungle that saw the Government offer entrepreneur Derek Handley the CTO job and then withdraw its offer and pay him compensation while it "rethought" the role.

STACY SQUIRES/STUFF Jilted CTO candidate Derek Handley donated his compo to charity but has said he was never given a proper explanation of why his job offer was rescinded.

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It understood the new group of expert advisers will operate within the same $500,000 budget that had been earmarked for Handley's salary and travel expenses, and that the group may only report to Woods, rather than also reporting directly to the Prime Minister.

In an email to technology industry leaders, Woods said she expected to take a paper to the Cabinet in March with more details, so final decisions could be made.

Woods said she had been advised that the sector still wanted the "CTO function" as it was viewed as being important for New Zealand's digital future, but that "it would be difficult to find one person with the skill set to do this role".

"Over the past few months I've sought advice from officials, consulted with industry stakeholders, and spoken with the Digital Economy and Digital Inclusion Ministerial Advisory Group about how best to go forward on delivering a CTO function.

"After considering this advice, I took an oral item to Cabinet on December 3 that recommended that the function would best delivered by a small group of people, rather than a single person. In recognition of this change the CTO function will need to be renamed," she said.

National Party communications spokeswoman Melissa Lee said a year had been wasted that should have been spent developing an innovative digital policy.

"The Government's default position on any policy is to farm out the work to a working group, which is exactly what Megan Woods has done by re-allocating the $500,000 CTO budget to a new 'digital committee'," she said.

Graeme Muller, chief executive of industry body NZTech, said the decision was heading the right direction.

No single person could be the "all seeing master of everything 'tech'" and the new approach recognised what was needed was to get the best advice to the Government, he said.

"The only negative is that it is going to take yet another period time, and technology is rapidly moving along."

The Government "shouldn't overlook" the opportunity get advice from the likes of NZTech and InternetNZ while it waited to put the new group of advisers in place, he said.