Health officials told Health Minister Tony Ryall that he could not intervene to stop a changeover in a $560 million contract for medical laboratory testing services in Auckland.
District health boards are paying more than $4 million per year to give part of the work back to the former contractor, to ease pressure on the new operator, Labtests.
As the new Health Minister, Mr Ryall, was briefed last December on the changeover, which was seen as a major risk in the health sector, because of the scale, complexity and value of the contract.
Radio New Zealand's health correspondent says he was under strong pressure at the time from doctors and others to halt or at least delay the change from Diagnostic Medlab Limited (DML) to Labtests.
Documents obtained under the Official Information Act show officials told Mr Ryall repeatedly between December and March that he lacked the power to intervene in the changeover.
They said he could be in breach of the Public Health and Disability Act and the Crown Entities Act and it could end up in a further judicial review.
Mr Ryall told the DHBs in January that he would be seriously dissatisfied if there were major problems.
The DHBs replied that all steps were being taken to lessen risks, but cooperation had not been forthcoming from the former contractor, Diagnostic Medlab Limited.
Mr Ryall says he will order an independent review when the problems are fixed.