While the question of whether New Zealand should become a republic was not in the list of topics the panel would consider, Dr Sharples said they were free to consult on it.
"They can look at anything they want to."
Issues around a republic were not in the original terms of reference "in case it got sidetracked as perhaps the main reason for doing this".
Mr English said the Government was not focused on constitutional change to a republic and had yet to see evidence of a strong public desire to see the matter debated.
"We believe our constitutional arrangements work pretty well and there would need to be a pretty broad consensus for change, and this group has the opportunity to see if that consensus exists."
Consultation was not expected to begin until next year, but the panel was likely to meet before the November 26 election to discuss how it would go about collecting submissions.
The panel would provide interim reports and make its final recommendations in September 2013.
The Republican Movement welcomed the announcement, but chairman Lewis Holden called for the idea of a New Zealand republic to be added to the terms of reference.
"An independent head of state is one of the issues many New Zealanders want discussed," he said.
But the panel was not greeted positively by Hone Harawira's new Mana Party, which said it marked the beginning of an "institutional review" rather than a "constitutional review".
"The only issues to be explored by this panel will be what the term of office should be for the Government, the size of the electorates and whether or not there should be more Treaty provisions within future legislation," said Mana co-vice president Annette Sykes.
THE GROUP
CO-CHAIRMEN
John Burrows, QC, a law commissioner, and former Ngai Tahu chairman Sir Tipene O'Regan.
Former New Zealand netball captain Bernice Mene, lawyer and former Dunedin Mayor Peter Chin, former New Plymouth Mayor Peter Tennent, journalist and former MP Deborah Coddington, former Deputy Prime Minister Michael Cullen, Maori researcher Leonie Pihama, former Cabinet Minister John Luxton, Te Kura Kaupapa teacher Hinurewa Poutu, Waikato University Pro Vice-Chancellor Linda Tuhiwai Smith, and Waitangi Tribunal member Ranginui Walker.