Maritime New Zealand won't allow the Interislander ferry Aratere to sail until an equipment breakdown that caused a serious safety issue is tracked down and fixed.
The ship had a $53 million refit in Singapore in April, plus a new $11 million power management system, but has been plagued by problems ever since.
The vessel lost power in Tory Channel on Monday evening, reducing it to one engine at one stage, and it has been out of service since.
Maritime New Zealand says the Aratere experienced another failure thought to be unrelated to previous events while maritime safety inspectors were aboard the ship during a sea trial in Wellington Harbour on Wednesday.
Transport Minister Steven Joyce says the ferry's owner KiwiRail and Maritime New Zealand will work closely to get the issue sorted as quickly as possible.
At a news conference Mr Joyce outlined the issues that need to be addressed.
"They relate to four matters including the control system failure that occurred on Monday night, a subsequent issue with the number four engine as they were heading out on sea trials this morning (Wednesday) which caused what they call a crank case explosion, which is what caused the puff of smoke that appeared above the ship and caused concern," he said.
Mr Joyce said there were two other matters, one related to a faulty fire alarm and the other emergency communications between the bridge and engine room.
He said Maritime New Zealand has been clear it won't let the ship sail until those issues have been properly addressed and KiwiRail said it's not interested in sailing until Maritime New Zealand is satisfied.
At least 10 sailings have now been cancelled this week.
MNZ general manager, maritime services, Sharyn Forsyth, says the authority on Wednesday afternoon imposed conditions on the Aratere.
"This means that the vessel will not be in operation until the Director of MNZ and Class Society (surveyors) are satisfied that the ongoing problems have been resolved and that the vessel is safe to operate."
The ferry also had to be towed back to port following engine problems last month.
Mr Joyce said it is hard to say if the breakdowns are related to the ferry's recent refit at a ship yard in Singapore, but they are serious.
