Local Government Minister Rodney Hide is threatening to sack Hamilton City Council after a damning audit report over council spending relating to the hosting of V8 supercars.
The Audit New Zealand report highlighted a lack of transparency over governance and reporting structures within the council under the previous regime.
Mr Hide says the council is on notice and if it fails to address the Audit recommendations sufficiently, the Government will look at a review process that could lead to the sacking of councillors and the appointment of a commissioner.
Mr Hide says the current Mayor Julie Hardaker has assured him the council is committed to taking action to remedy their practices and restore the confidence of ratepayers.
He says he supports this approach and has asked Ms Hardaker to report on how the council intends to respond to the Audit report and provide a timeline for action.
Mr Hide says the Mayor told him the council will look at pursuing any civil or criminal liabilities.
Ms Hardaker said the council is acting.
"I think this is a wake-up call for all local government that there are avenues for the government to act. I think one of the good things to come out of this is that the minister has recognised that, over the past few months under my leadership, we have put in a number of changes."