The Labour Party says a leaked document confirms the Government has scaled back its planned job cuts for the Foreign Affairs and Trade Ministry (MFAT)
However, the Government says it is no secret that the proposals are a work in progress.
In February this year, MFAT announced it planned to cut more than 300 jobs and close two embassies in Stockholm and Warsaw.
But Labour's Foreign Affairs spokesperson Phil Goff said on Wednesday the leaked document, due to go before the Cabinet next week, confirms that the Government will revise its original plan.
During Question Time on Wednesday, Mr Goff told Parliament that a Cabinet document and letter from staff at MFAT's trade negotiation division has been leaked to him.
Mr Goff says the document confirms that MFAT intends to axe 146 jobs instead of 304 and close the embassy in Sweden. It also shows embassies in Madrid and The Hague may also be closed at a later date.
In the letter, staff say their confidence has been undermined to the detriment of the ministry's operations.
Mr Goff also asked about another Cabinet document in which he says Foreign Affairs Minister Murray McCully says plans were revised because they failed to get staff buy-in.
"Especially senior staff and 'that there were too many unachievable elements' - in other words, the original recommendation in the whole process were botched and they're now having to do a total U-turn."
Acting Foreign Affairs Minister Chris Finlayson, responding on Mr McCully's behalf, said it was no secret that plans had been criticised and revised.
"The minister has emphasised the need for the ministry leadership to pay close attention to all feedback before any decisions are made. Those decisions will be for the chief executive to make."
Phil Goff says MFAT's chief executive John Allen is being used as a scapegoat for the badly handled process of cutting costs.
Mr Goff told Radio New Zealand's Checkpoint programme on Wednesday the letter from staff at the trade negotiation division highlights the damage that has been done to their confidence and the ministry's ability to retain employees.