Bruce Thomson claims Palmerston North City Council is allowing an arms expo involving companies that trade weapons and devices that kill babies.

Tighter rules may be on the way to make sure hirers of Palmerston North City Council venues meet "ethical" standards.

The move from the council comes amid acrimony over a defence industry forum that protesters call a weapons expo. Opponents say the city should be clear about rejecting "truly vile weapons" and "blood money", but mayor Grant Smith is hotly opposed to a restrictive policy on venues use.

Smith said councillors should not be deciding what events they liked, and which they did not, and any restrictive policies would undermine use of the venues, their commercial viability, and send the wrong message to professional staff.

Councillors voted 11-4 to review the policy and debate about it is likely to be behind closed doors, with several councillors declaring their support for discussing the matter in secret.

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Smith accused political parties of pulling the strings of the two openly party-political councillors to bring about the review – Brent Barrett is supported by the Green Party and Lorna Johnson by Labour.

He said putting restrictions on use of council facilities would harm the city's reputation and be "a shot across the bow" of the Defence Force.

MURRAY WILSON/STUFF Protesters outside the Palmerston North City Council building oppose a Defence Forum being held at a council-owned venue.

Warning: In the below video a protester cuts his hand. The results are not graphic.

A handful of protesters greeted councillors arriving at the council chamber on Monday morning, claiming the forum would involve the sale of weapons used to kill civilians.

Several speakers, including Peace Action Manawatū spokesman Fred Hirst, begged the planning and strategy committee not to accept the forum's "blood money".

Hirst said Peace Action respected New Zealand's Defence Force, but the forum was different, with businesses that made profit from dealing in weapons of war deeply embedded into the organisation of the forum.

Their activities were in conflict with the council's own stand on ethical investment, which avoided funds involved in controversial weapons, tobacco, production of fossil fuels and casino gambling, he said.

But councillors made no move to cancel the booking after Venues and Events manager John Lynch told them there was a contract in place.

MURRAY WILSON/STUFF Palmerston North mayor Grant Smith attends a parade in 2016 to reconfirm the 1956 charters that granted Linton Military Camp and Ōhakea airbase the right to parade in the city.

There was support for the review after several recent controversies about bookings of public and university venues for divisive speakers. Auckland Council cancelled a booking at its venue for far Right speakers Lauren Southern and Stefan Molyneux and Massey University cancelled a visit by former National Party leader Don Brash.

Proposed by Barrett and supported by Johnson, the calls for the council to have policies in place to ensure events at ratepayer-owned facilities met ethical standards attracted a smattering of applause from the anti-forum audience.

Barrett said it was wise and could only enhance Palmerston North's reputation to be clear in its opposition to things like "truly vile weapons".

"If an event has links to the manufacture and sale of those weapons, it is not only our right but our responsibility to say no thanks."

Johnson said councillors needed to provide clear leadership about what was acceptable use of council venues.

Protest against the defence industry forum was likely to bring unwelcome publicity, she said, and hosting it undermined the city's reputation as a welcoming city for refugees, some of whom had fled the sort of weapons likely to be associated with the forum.

With Defence Forces bases at Linton and Ōhakea, Manawatū has sometimes been called the defence capital of New Zealand.

In 2016, the council estimated defence was worth more than 6900 jobs in the region, an increase to total household incomes of $264 million and a $540m increase in regional gross domestic product.

Smith, then-mayor of the Manawatū District Margaret Kouvelis and then-Chief of Defence Force Lieutenant General Tim Keating also signed a document that year to record their intention to work together to create mutual benefits.

MURRAY WILSON/STUFF Protester Bruce Thomson urges Palmerston North City Council not to accept "blood money" from the Defence Industry Forum.

The development of a venues policy is likely to disappear behind closed doors.

Strategy and policy manager Julie Macdonald suggested a councillor workshop to provide direction to staff about what the policy should include and how it would work.

Workshops are generally not open to the public.

At least three councillors specifically mentioned a workshop as the appropriate way to go.

The councillors who voted with Smith in opposing the policy development were deputy mayor Tangi Utikere, Adrian Broad and Bruno Petrenas.