KEY POINTS:
Air New Zealand chairman John Palmer has written to Prime Minister Helen Clark expressing his concern that she used information given to her in confidence to politically swipe Australian Foreign Minister Alexander Downer.
At issue is Helen Clark's revelation that Air NZ carried out another charter flight operation for Australian troops the day after Mr Downer said the Australian Defence Forces would no longer use the airline.
In the later case, Air NZ carried troops to Honiara. This followed the original uproar over flights to the Middle East.
The Herald understands the Palmer letter was sent to Helen Clark this week. The paper also understands that Air NZ believes her comment flies in the face of a confidentiality agreement signed between two airline directors and the Treasury solicitor in March 2002.
The Prime Minister's office last night refused to make the Palmer letter public.
"John Palmer's relationship is with the shareholding minister," Helen Clark said through her press secretary. "So any issues he has should be referred there."
Air NZ believes tens of millions worth of dollars of Australian Defence Force business has been jeopardised by the Government's aggressive public reaction to the airline's two Middle East flights.
An Australian edict has since been issued ordering that any future tenders by Air NZ must be referred to the Defence Force's head of procurement.
The airline reads this as introducing a political element into what has until now been a purely commercial tendering process for valuable business ranging from engineering contracts through to charter flights.
Mr Downer also revealed to the Herald that he asked Australian High Commissioner John Dauth to check the records of a bilateral meeting he had with Helen Clark after the Prime Minister said he had broken an "unspoken convention" by making an after-dinner speech to the recent National Party conference in the run-up to the election.
"I said I would not be making any party political points or engage myself in NZ politics," said Mr Downer.
