The New Zealand government has been ordered to review a decision allowing a Chinese company to buy 16 dairy farms on the North Island.

The government approved the sale of the 16 farms to Shanghai Pengxin late last month, saying it would help to further economic and export opportunities with China.

But a New Zealand business and farming consortium which had also bid for the farms went to the High Court seeking a judicial review.

It argued that the Chinese company did not have experience in the dairy industry and did not offer any particular economic benefit to New Zealand.

The bid is understood to be about $150 million.

The court appears to agree that the law had been misinterpreted by the Overseas Investment Office and should be reviewed.

Prime minister John Key says the Overseas Investment Office will now review its decision, taking into account the court's interpretation of what constitutes a "benefit" for New Zealand.

Minister for land information Maurice Williamson says the ramifications could be widespread.

"This is not a Chinese issue. Any German, any person from Switzerland or Sweden or anywhere else now looking to buy now, this criteria may now be very difficult to assess," he said.

He says the review may be finished within days.