Labour MP Louisa Wall has said that people who don't support transgender rights shouldn't be in the Pride parade.
Ms Wall was secretly recorded at a hui about the Auckland Pride Parade making comments about "terfs".
She was heard saying: "I don't want any f**king terfs at the pride parade."
Terf stands for trans exclusionary radical feminist and is seen as a slur. The term is used by by transgender advocates to describe feminists who oppose the inclusion of transgender people in female spaces.
"We were at a hui discussing the police and from my perspective I've been more preoccupied about others coming to the parade that fundamentally were going to attack and vilify members of our community," she told Morning Report.
She cited an incident from this year's London Pride parade. There was a group of trans-exclusionary participants who hijacked the parade which caused a lot of trauma in the community, she noted.
"So, I chose that forum to actually highlight an issue that hopefully the organisers of Auckland Pride have thought about what the potential impact on our trans community could've been if there were people there who fundamentally don't believe that they exist."
For her, the Pride parade has always been about "celebration, it's been about us coming together as community ... all of us the LGBTIQ in all our forms and all our variety".
"It's sad, we've lost what Pride is all about," she said explaining that Pride was a space where members of the community could be represented.
The Auckland Pride Parade after months of consultation with LGBTQI community members, decided that the police could march in the parade next year so long as they aren't in uniform.
However police said if they couldn't march in uniform they would not march at all, and their decision to withdraw from the parade hasdivided the LGBTQI community.
"Maybe there was another uniform they could've worn, a ceremonial uniform," Ms Wall said.
"There are elements of our community who are now saying for example they still feel like they are being victimised by police, and that police aren't as inclusive and diverse of all of our LGBTQI identity.
"I think there should've been a discussion before a determination was made. I know that the police have been doing a lot in the diversity and inclusion space. I'm disappointed that the police can't be represented in a way where it's obvious who they are.
Asked if she'd want Prime Minister Jacinda Ardern to go to the parade next year she said: "Why wouldn't I?"
"I want everybody to go. I want our corporate sector to go."
In the recent weeks, however, several firms withdrew their support for the parade including SkyCity, Vodafone, BNZ, ANZ, Westpac, NZME, Fletcher Building, the Ponsonby Business Association, NZDF and the Rainbow New Zealand Trust.