Kelvin Davis: "I can confirm, we will not be building a mega prison with 2500 beds as proposed by the National government."

Corrections Minister Kelvin Davis has confirmed the Government will not build a "mega-prison" in Waikeria, but the decision on what to do instead is still pending.

The previous National government planned to spend roughly $1b on expanding Waikeria Prison, south of Hamilton, to potentially house up to 3000 prisoners, making it the largest prison in the country. The prison currently houses around 650 prisoners.

The new Government had been putting off the decision on whether to go ahead with that plan or not, as many Labour MPs have a strong desire to reduce prison numbers. There has been a strong indication that the plan would be changed significantly for several months.

The current Waikeria Prison.

But Māori Development Minister Nanaia Mahuta told TVNZ's Marae on Sunday morning the Government would "not going to be throwing $1b at Waikeria Prison".

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Asked for further comment Davis said the wider decision was still pending but confirmed the "mega-prison" plans would not go ahead. However, he left the option open to expand the prison more moderately.

"We are looking at all the options to deal with the rising prison population and our current capacity crisis," Davis said.

"I can confirm, we will not be building a mega prison with 2500 beds as proposed by the National government.

"But that decision alone does not deal with the challenges I have mentioned. And we will take action, but it will be considered and not reactive."

Davis said he would be taking his time to make the right decision, looking at "all the options across the board". He said he would be working with Justice Minister Andrew Little and Police Minister Stuart Nash.

In the Budget on Thursday, the Government announced 600 new prison beds to be built in modular units but would not say whether the extension of Waikeria would go ahead.

Finance Minister Grant Robertson said on Twitter it had been clear the Government were not favouring the mega-prison for some time, but Cabinet had not made a final decision.

As recently as Friday the union representing prison workers was calling on the Government to make a decision soon.

"All prison staff, including Community Corrections staff working in prisons, are under constant pressure, because prisons are so overcrowded they can't do the rehabilitation work inmates need," Public Services Association organiser Willie Cochrane said.

"600 beds will not be enough to ease the current crisis, because so many of the current prison areas are not fit to house inmates.

"If that expansion isn't going ahead, we want to hear what more he'll do to expand the capacity of our prisons in the short term and keep our members safe in the workplace."

Cochrane said on Sunday his members wanted a clearer response.

"Frankly, this comment from the Minister leaves us none the wiser," Cochrane said.

"Our members welcome Labour's commitment to cut the number of people in prison. But right now, the system is close to breaking point, and our members are getting frustrated at the time the government is taking to reach a decision."

The Labour-led Government has promised to reduce the prison population by 30 per cent in 15 years, something Davis said would take the full 15 years.

National's corrections spokesman David Bennett said ruling out the prison would put prison-workers and prisoners at risk.

"The current Waikeria environment certainly isn't suitable for staff," Bennett said.

"The Government's failure to build Waikeria shows that they are not serious about delivering a corrections system that works going forward."

He said the Government were letting principle get in the way of what was needed.

As of April, the Department of Corrections was undertaking preparatory work for the expansion.

It's understood the Government are hoping to make a full and final decision by the end of May.