National Party leader Judith Collins says Green Party co-leader James Shaw should resign over his mistake approving a $11.7 million grant for Taranaki Green School.
"I'm surprised he didn't resign yesterday. I think he should," Collins said.
Shaw also held up the process of releasing the list of government grants for "shovel-ready projects", she said.
"It's not just that he advocated for a particular Green School that doesn't even have education registration to be a school, but that he's actually held up all these projects on the basis that he was holding the rest of the government basically to ransom," Collins said.
"This is totally unacceptable."
Collins said about 400 people lost their jobs every day last week and approving the projects was important to ensure organisations had certainty about upcoming work.
Shaw has apologised for his mistake in approving the grant to the private school, despite the Green Party having a policy against public funding for private schools.
He hoped the grant might be treated as a loan.
Collins said other Taranaki schools badly needed more funding and she supported more funding for public schools and integrated schools.
Green School funding wouldn't go to public sector if rejected - chief executive
The head of the school at the centre of Green Party controversy says even if it were to reject the $11.7 million funding, none if it would go back into the region or public schools.
Yesterday, Shaw said he now wanted the funding all converted into a loan.
However, Green School chief executive Chris Edwards told Morning Report most of it was going to be a loan anyway.
"Just to be clear, never ever was this a 100 percent grant. The application ... was for 25 percent grant and the rest was a series of loans."
Although he could not say whether that meant the money could be completely pulled.
"We feel very, very strongly about this situation, so I don't know the answer, my understanding though is that a contract actually has been signed in some form and that we're actually waiting for information from [the Crown infrastructure partnership] as to what the nature of the funds will look like."
Edwards said he wanted to clarify any public misconception that the funding was taken away from the public education sector, which he supported.
"If for example we were to return the funding - and I see there's a lot of misinformation in public discourse - let's just say we did that for a moment, and pleased some people in election season, my understanding there is that not a penny there goes back into the public sector for example it's not an education fund, and also not a penny of that comes back to Taranaki.
"We applied for a job-creating values-based community-rich fund that was going to help the Taranaki community.
"I understand the optics by the way, if you just read the headlines I completely understand why people think what they think.
"It was a Covid specific fund for shovel ready infrastructure projects, not a penny of which came from any education funds.
"I've been in education for 30 years, I'm now mortified to hear somehow Green School is being set up in a binary position against the public sector."
He said he saw the school as "the baby left on top of the mountain" because it was election year.
CEO says no endorsement of controversial event
But the school is also facing controversy from another space, with a person claiming on their website that their partner planned to plant a crystal grid on school property with students.
Edwards said there were many people and organisations who used their campus, but that the school did necessarily endorse all views.
He did not deny the school's campus had been used by the individual, but added he was not in attendance.
"I didn't attend that event, lots and lots of people in the school didn't attend that event, I don't actually know what happened there. It is simply somebody who used the campus and that's fine, we're not going to stop people from doing that if they so wish.
"Any students included in that - if they're from the school or not - would be voluntary. This is on an individual's website, not the school's. So I feel it's very difficult for me to talk about the beliefs and behaviours of another individual ."
Asked on how that would reflect on the school, he said it was up to the public to form their opinions but he was clear it was not part of their curriculum nor on their website.
"I'm trying to be as honest and open as I can. People will have to make up their own minds about the school's image when the CEO of the school says the school does not endorse it, it is not part of the curriculum. And if people decide what's on an individual's website is reflective of the school, then I can't help that. I can only say what I'm saying now repeatedly very honestly to you."
He said the unfolding events and controversy had taken a toll.
"I think this week has been the unhappiest week of my professional life. I feel that we've been drawn into something that we never intended to be involved in."