The Fiji military regime has threatened to expel New Zealand's top diplomat there unless the New Zealand government agrees to relax the travel sanctions imposed following the coup two years ago.
The interim Fiji government is considering expelling New Zealand's acting high commissioner to Fiji, Caroline McDonald.
Other High Commission staff could also be asked to leave.
This comes 18 months after High Comissioner Michael Green was forced out of the country, with Fiji's interim Prime Minister, Commodore Frank Bainimarama, accusing him of meddling in Fiji's affairs.
The interim Government has demanded that a ban on the son of the private secretary to President Ratu Josefa Iloilo be lifted so he can return to his studies.
George Nacewa had been at university in Wellington but was forced to sit end of year examinations in Suva after a renewal of his student visa was turned down.
His father is on the list of those banned from entering New Zealand because of his links to the regime - a ban that applies to all immediate family members.
The interim Government also wants a relaxation for others who have family members connected with the regime.
Meanwhile, the Commonwealth will consider fresh penalties against Fiji at a meeting early next year if it fails to return to democratic rule.
The Commonwealth Secretary-General Kamalesh Sharma says, if the situation remains unchanged, the body would meet in the New Year to consider further measures.
Last week, the Australian Foreign Affairs Minister, Stephen Smith, said if Fiji did not hold an election by the end of next March it could be suspended from the Commonwealth.