Transport Safety Minister Harry Duynhoven supports banning cellphone use while driving but says the Government will not be rushed into making a decision.
Seventeen people have died in road crashes blamed on cellphones over the past seven years, but Mr Duynhoven denied that the Government was dragging its feet.
He said the Ministry of Transport was looking at the issue of driver distractions - from phones to changing a CD - and the work should be done in a few months.
"Years ago when we were in opposition I came out saying we should ban cellphones - handheld certainly but maybe even all of them - because of the distraction factor," the minister said. "But it's an issue we have to work through."
In the meantime, he advised drivers to pull over and stop to answer cellphone calls.
Mr Duynhoven said Sweden considered banning all cellphone use while driving but decided against it, believing hand-held phones may in fact be less distracting than hands-free kits.
"They say it's more natural. [The theory is] people are much more used to talking on a telephone and holding it to their ear than concentrating on some disembodied voice."
His view is backed by overseas research, which has found marked differences in the impact on driving of conversations with passengers and conversations with someone using a hands-free kit.
One British study suggested this was due to a lack of natural cues when people are visually separated from each other while talking.
Britain banned hand-held mobile phone use while driving in 2003, but it is still legal to talk on a mobile phone while driving using certain types of hands-free gear.
A University of Utah study showed conversations using either hands-free or hand-held cellphones significantly cut driving performance and caused increases in response times to simulated traffic signals.
The Royal Society for the Prevention of Accidents said in a 1997 paper that even though physical distraction would seem to increase the likelihood of accidents, mental distractions had also been identified.
It said heart rates - a measure of driver stress - were higher during cellphone calls than during conversations with vehicle passengers.
Meanwhile, the Insurance Council has reversed its view on hands-free kits, saying there was "very strong anecdotal evidence" that they caused accidents.
In a submission to the ministry on the issue in early 2003, the council supported banning hand-held phones but was not so sure about hands-free phones.
Council chief executive Chris Ryan said there was no suggestion yet that insurance companies were changing motor vehicle policies to exempt drivers from coverage if they had an accident while using a cellphone.
He said it was "possible" that if a ban were imposed insurers could write exemptions into policies but even that was not necessarily the case.
"You can do something that is in breach of the law and still be covered. The obligation is on the insurance company to prove that your actions were the sole cause of that accident."
The Road Transport Forum said it was against banning cellphones as there was no real evidence of increased accidents.
The forum, which represents the trucking industry, said professional drivers - such as taxi, truck and bus drivers - had been using communication devices for years without problems.
Allan Kirk from the Megarider Organisation, which deals with motorcyclist road safety, said banning phones would make it difficult to report dangerous driving.
He said cellphone-related accidents could be prevented through education and tougher penalties for those who crashed.
Effect of cellphone use on driver performance
* Tendency to veer out of the lane while placing a call.
* Reduction in speed indicating difficulty maintaining attention.
* Slower braking response and overall reaction times.
* Tendency to drive through gaps smaller than their car.
* Increase in mental effort.
* Less likely to check mirrors.
* Fourfold increase in likelihood of an accident in the five minutes after a call has ended.
Source: 1997 paper from Royal Society for the Prevention of Accidents
Slow road to cellphone ban
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