Labour has agreed to delay the reporting of a Member's Bill on paid parental leave until the end of February.
Under the bill, promoted by Sue Moroney, new parents could get paid parental leave for six months but the Government had threatened to use its financial veto to stop it.
Ms Moroney now says National has approached Labour to delay the report back of the bill so it can reconsider its position. She said it is not clear yet where there might be room for compromise.
Finance Minister Bill English said it is possible that he would not veto the bill, but it depends on how much the policy would cost and how soon.
Mr English said he understands the select committee that considered the bill looked at staggering the start dates and reducing the number of weeks, but it is too soon to say what the Government might do.