Finance Minister Bill English says Solid Energy is not in good enough shape for a share float any time soon.
The Government wants to sell up to 49% of the state-owned coal company as part of its partial asset sales programme along with Mighty River Power, Genesis Energy and Meridian Energy.
Mr English on Tuesday confirmed that the Government is having intensive discussions with the board of Solid Energy about the state of the coal business.
The minister says Solid Energy has signalled that a big drop in world coal prices means it has to rethink the business. The company faces a number of challenges now that the coal market is much less attractive and that might lead to changes in strategy.
Mr English says there have been discussions about the range of Solid Energy's activities and whether they need to be reined in.
Up until world coal prices fell, it looked like the company was able to run its core business while engaging in wider research and development activities.
Mr English says the Government is keen to ensure Solid Energy remains viable. He says he does not want to prejudge the timing of the sales and which companies may be sold before the next election.
Call it off, say Labour and Greens
The Labour and Green parties say the minister's comments are further evidence that the partial asset sales programme should be called off.
Labour says it is the wrong time to sell any assets, given the global economy and the water rights case before the Waitangi Tribunal.
Green co-leader Russel Norman says not going ahead with the partial sale of Solid Energy would leave a hole in the Government's books.
"On the one hand the Government tells us that they don't think Solid Energy is ready to be sold, and on the other hand they've already booked the proceeds in the Government books.
"They can't have it both ways ... If they really think that it can't be sold, they should take the proceeds off the books."