The State Services Commission has shut down the inquiry into how Budget sensitive information was accessed from the Treasury website, because a key member failed to declare a conflict of interest.

Photo: RNZ

Commissioner Peter Hughes ordered the investigation after the National Party released the highly sensitive information in the week leading up to the May Budget.

He says the inquiry into exactly what happened - led by Murray Jack - has been closed down because a key member of his team failed to declare a conflict of interest.

Photo: RNZ / Rebekah Parsons-King

A new inquirer, Jenn Bestwick, has been appointed to start the process afresh.

Mr Hughes said it was very disappointing, but restarting the investigation was the right thing to do.

"Near enough is not good enough when it comes to integrity.

"Terminating the current investigation will be disappointing for staff at the Treasury but it is appropriate to take the extra time to ensure the investigation's credibility," he said.

The investigation is looking at the security of the Treasury's Budget process, what happened with the information breach, and what has to be done to avoid any repeats in the future.

Interview transcripts and other material gathered during the course of the current investigation would be re-used to the extent possible, said Mr Hughes.

The investigation has a reporting deadline of next February, and should be completed close to or within the original budget of $250,000.

The Finance Minister said he was very disappointed the investigation had to be restarted.

But Grant Robertson said he still had confidence in the Treasury.

"The Treasury Secretary has advised me that she's getting on with improving the systems and processes around their IT, that there's no trouble in terms of next year's Budget.

"This is just a disappointing development but that's for the State Services Commissioner to deal with," he said.