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The Government has been urged to intervene to end a bitter row among members of a West Coast trust that manages more than $120 million belonging to the region.
The trust appears in disarray, with bitter division on the board, court action against one of the trustees and a probe looming by the Auditor-General.
The situation has grown so tense that both West Coast MP Damien O'Connor and Finance Minister Michael Cullen have taken a close interest in what is happening with Development West Coast.
The trust started out with $92 million from the Government to compensate the region for the loss of its native logging industry.
Development West Coast chief executive Mike Trousselot rejected any claims the trust was struggling, saying its financial performance had been consistently strong.
The trust had grown the $92 million payment from the Government to more than $126 million, while giving more than $15 million in community grants.
In the High Court at Christchurch this week, a civil case by Development West Coast against one of its own trustees, Bruce Smith, for allegedly leaking sensitive documents went before a judge for the first time.
Mr Trousselot said the action was taken after confidential financial information was leaked to the Auditor-General's office and to local media.
Mr Smith's lawyer, Garth Galloway, argued that the authority of the trust to take the court action was in doubt when most of the trustees were not even consulted about it.
The information leak has led to the Auditor-General's office preparing to investigate Development West Coast's affairs.
Mr Trousselot said he was confident the probe was a red herring and would uncover no "matters of substance".
A spokesman for Finance Minister Michael Cullen said the minister was awaiting a letter from the trust to update him on its situation.
Dr Cullen would not comment on the trust until the letter had been received.
West Coast mayors have been scathing of the leadership of Development West Coast, in particular of chairman Frank Dooley. An attempt to oust him from the role in September failed after a 6-6 deadlocked vote.
The board was reduced from 12 trustees to six after a review and the new board met for the first time on Monday.
The meeting ended with a three-way split over the election of a chairman, and the trustees will now seek legal advice and will request that a seventh trustee be appointed.
Greymouth Mayor Tony Kokshoorn said it was time someone from Dr Cullen's office stepped in to provide independent leadership.
At present things were "well and truly deadlocked" on the board.
"People are very tribal ... I'm in no doubt that the trust will sort itself out."
