A New Zealand Government MP and former diplomat, John Hayes, says there has to be a rethink of Wellington's relationship with Niue, the Cook Islands and Tokelau.
Niue and the Cooks Islands are independent in free association with New Zealand while Tokelau has voted against such a status.
Mr Hayes, who heads parliament's foreign affairs select committee, says he is not advocating changing the constitutional arrangement, but wants to see improved service delivery, to ensure people, who are New Zealand citizens, receive what they are entitled to.
He says the current model has failed because 90 percent of Cook Islanders and 98 percent of Niueans now live outside of their home countries.
"What I am suggesting is that we cannot have enclaves of people with New Zealand citizenship suffering from inadequate standards of education, health, infrastructure and law and order services."
The opposition Labour Party has criticised the comments and says the unprecedented statement must be condemned by the prime minister, John Key.
Labour says remarks like his could sour longstanding friendships between New Zealand and island communities like the Cooks, Tokelau and Niue and open opportunities for others with potential consequences for New Zealand.