Talks between councils and the Government about how to fund the leaky building repair bills have reached a stalemate.
Mayors from six cities have rejected a Government proposal that they fund 30% of the costs, and home owners pay the rest using a Government-guaranteed bank loan with subsidised interest rates.
As a result, Building and Construction Minister Maurice Williamson says he will take a new proposal to the Cabinet suggesting that home owners cover the entire repair bill with a Government-backed loan.
But the councils insist a split of 25% council, 25% Government and 50% home owner is fairer.
Mr Williamson has issued a report by PricewaterhouseCoopers which estimates about 42,000 houses could be affected - many more than previously acknowledged.
Mr Williamson says the Government will guarantee any loans that banks extend to leaky home owners for repairs.
He says the deal is the best the Government can do given its poor fiscal situation.
Mr Williamson says the loans should be available to homeowners by the end of March next year.