The Government has pulled out of plans to restrict deep sea trawling that would have protected orange roughy.

The Government pulled plans to put major restrictions on deep sea trawling after the fishing industry threatened legal action.

Officials and scientists from New Zealand and Australia had been working on the joint proposal since 2012 and it was finally due to go in front of an inter-governmental body in Peru in late January.

It was designed to protect the stocks of orange roughy in the high seas and prevent the destruction of delicate seabed life like coral and sponges.

But just weeks before the meeting, the High Seas Fisheries lobby group – which includes Talleys and Sealord – wrote to the Government threatening legal action.

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Deepwater Group, a second lobby group which included Sanford, also demanded an urgent meeting. Their lawyer Bruce Scott followed up with a personal phone-call to Deputy Prime Minister Winston Peters' office.

ROBERT KITCHIN/STUFF Deputy Prime Minister Winston Peters said appropriate process was being followed.

Within weeks, the proposal – to be voted on by the South Pacific Regional Fisheries Management Organisation – was abruptly withdrawn from the agenda. The move raised eyebrows among diplomats from other countries because the joint NZ-Australia proposal was already two years late.

Peters sent his officials to hear the industry concerns. He wrote back to HSFG confirming: "as an outcome of these discussions, officials advise the measure will not be formally proposed at this year's meeting."

The case has echoes of a legal threats over a proposed marine reserve in the Kermadec Islands, which has yet to be resolved.

In response to questions from Stuff, Peters said the proposal was dumped "because Australia and NZ had not reached a final agreement on the CMM [conservation management measures]". He added: "An appropriate process is being followed and no one will have an undue influence over the process."

But he didn't communicate the decision to the environmental groups involved in drafting the proposals, who were blind-sided and left "frustrated".

Duncan Currie of the Deep Sea Conservation Coalition said they were "pretty stunned when we first heard and continue to be stunned".

"There was an extensive series of consultations [on the proposal] in New Zealand, Hobart and China ... we thought we were nearly there."

Currie, also a lawyer, said there was "no grounds" for the legal action, and the industry would be "struggling" to raise a case in New Zealand's domestic courts because the matter related to international rules. "The Government had nothing to be concerned about."

He was disappointed the Government had bent to the pressure. "I don't know what went on in backrooms ... but we know the end result and presumably that came from a ministerial level."

The fishing companies objects to limits on the catch of orange roughy – a deep-sea delicacy that grows slowly, making it vulnerable to over-fishing – and measures to close areas where fragile marine life was discovered.

Talley's operations manager and HSG chair Andy Smith told SPRFMO officials: "Livelihoods will be lost, food and economic benefits will be forgone."