Prime Minister John Key says the Government could spend up to $20 million on a temporary facility at Auckland's Queens Wharf for the 2011 Rugby World Cup.
The intended Queens Wharf revamp in the central city is aimed at providing a party hub for the tournament and allowing the wharf to be used by cruise ships.
On Tuesday, Auckland mayor John Banks said the Government was trying to force the city to spend more than $100 million on the redevelopment. The original estimate was put at $47 million.
Mr Banks said it was intolerable for the Government to decide what it wants and then make ratepayers pick up the bill.
However, Mr Key said the Government does not want to tell Auckland what to do. He said Queens Wharf is a premier site on the waterfront and it is important that long and short-term objectives are achieved.
Rugby World Cup Minister Murray McCully said it was the first time he had heard of a $100 million price tag on any option.
Mr McCully said all options will be considered for the redevelopment of Auckland's waterfront - not just the ones Mr Banks likes.
Long-term view on revamp urged
A group representing central city businesses in Auckland wants a long term view to be taken on redeveloping the city's waterfront.
Heart of the City chief executive Alex Swney says money needs to be saved for the right plan, and the redevelopment should not be based on a knee-jerk reaction to the 2011 Rugby World Cup.
Mr Swney says politics is getting in the way of strategic planning, and rushing the changes will mean missing out on the opportunity for a meaningful long-term development.