The Justice Minister says universities are in a difficult position, as stickers promoting a white supremacist group appear on campuses across the country.
The material promoting the recently-launched group has been seen at the University of Auckland and has now been spotted at at least two other campuses.
Auckland University has been criticised for refusing to rid its campus of the material, saying it's protected by freedom of speech.
Andrew Little said it was a difficult situation, as these institutions had a responsibility to uphold academic freedom.
"Some of these things that are appearing, are they genuinely expressions of academic, intellectual and ideological views that are properly the subject of public debate, or are they expressions that are intended to be discriminatory and demeaning and delegitimising?
"There's no principle of academic freedom that says that ought to be protected."
There was a difference between the debate over having "controversial" speakers on campus, Mr Little said, and a set of stickers and posters that were trying to "diminish the status of other people".
If history tells us anything, some of the most violent expressions of political ideology started with what looked like harmless beliefs, Mr Little said.
"The question we ought to ask ourselves is at what point do you say this goes beyond and idea that we should tolerate, to something the ultimate expression of which is acts of violence against individuals and communities."
It is a difficult line to draw between expressions that are discriminatory and those that express an idea, even if it is unpopular, Mr Little said.
"The reason why I have asked the Ministry of Justice and the Human Rights Commission to have a look at the laws that deal with what we characterise as hate speech is precisely because that one is a difficult one to draw and there is a question about whether our existing laws, particularly in relation to inciting harmony on those discriminatory grounds, is adequate."
In March, Mr Little indicated he was fast-tracking a law review, which could see hate crimes made a new legal offence.
He expected to report back with some options to consider by the end of the year.