Prime Minister John Key is adamant no money from partial asset sales will go to the financially troubled state-owned enterprise Solid Energy, even though Budget papers reveal that up to $100 million could.
Mr Key's comments contradict those of Finance Minister Bill English, who earlier on Monday confirmed the money had been put aside for Solid Energy.
The Future Investment Fund is using the proceeds of the sale of shares in state-owned power companies to invest in other capital projects such as new state assets and infrastructure.
Budget documents released on Friday show that already agreed investments from the fund include the Christchurch hospitals redevelopment, irrigation schemes and the National War Memorial Park - and Solid Energy.
Yet on Monday morning Mr Key told Newstalk ZB that's not the case.
English blames 'over-zealous' officials
Earlier, Mr English said the money - which is set aside but not committed - would be used to pay Solid Energy's workers' wages and creditors.
"It's not an indication of the Government's ultimate support or lack of support for Solid Energy," Mr English said. "It's an arrangement being made to ensure that - while all these discussions are going on - if things got really difficult the wages get paid and the suppliers get paid."
Mr English said the alternative would be to borrow the money.
Later on Monday Mr English blamed over-zealous Treasury officials for suggesting money from partial asset sales could be used to prop up the company.
Mr English says he has checked the Cabinet minutes and they do signal the Government might have made an unsecured loan or bought assets to help the coal company.
He says on that basis the Treasury would have accounted for it out of spending from the Future Investment Fund.
Mr English says, though, the Government had no intention of doing that.
PM 'lost plot', says Labour
The Labour Party's state-owned enterprises spokesperson, Clayton Cosgrove, says Mr Key has lost the plot and is making it up. He says the public has been misled about how money from state asset shares will be spent, because it has never been told that money from the fund would be spent this way.
Mr Cosgrove also says the banks with whom Solid Energy is negotiating now know how much the Government is prepared to put up. "You've just told the banks what the threshold of pain is," he says.