The Government will continue to seek a diplomatic solution to whaling although the latest proposal to resolve the problem is unacceptable, Foreign Minister Murray McCully says.
It was claimed between 4000 and 18,000 whales could be saved over the next 10 years under the compromise proposal, which sets lower catch limits for all three whaling nations than their own self-imposed quotas.
There would be rigorous monitoring of whaling, and no other countries in the 88-nation commission would be allowed to start whaling during the 10-year plan.
The environmentally delicate Southern Ocean would be designated a sanctuary, but whalers from Japan would still be allowed to take a number of the marine mammals from the seas around Antarctica.
The IWC will take decisions at its next meeting in June.
Mr McCully said the proposal fell "very seriously short" of being the basis for a negotiated settlement.
"The catch limits proposed in the Southern Ocean are unrealistic," he said. "The proposal to include fin whales in the Southern Ocean is inflammatory. New Zealanders will not accept this."
Mr McCully told reporters the next step would be to "fairly urgently" explore what room there was for a significant shift towards meeting New Zealand's bottom line and its objective of eliminating whaling in the Southern Ocean.
"It's not for me to make decisions about where we go from here," he said.
"We'll obviously have a discussion amongst ministers and amongst those involved in the Parliament."
Mr McCully said some would consider the inclusion of the small fin whale in the proposal as a negotiating position.
"It wasn't a very smart negotiating position," he said. "It was inflammatory and it shows that there have been some unhelpful influences at work. I personally think it's offensive."
Mr McCully said the alternatives to seeking a diplomatic solution were "pretty awful".
"We could see no controls, in terms of international waters, on whaling," he said.
"That's why, at some political cost, I've been anxious to keep the door open for these discussions to make progress."
If the diplomatic process was abandoned, there was a "reasonable chance" the IWC would effectively cease to operate," he said.
"That's why we should not rush into this judgment and take things carefully. But for the process to be kept alive, it's got to be a productive one."
Australia is considering taking a case to the International Court of Justice (ICJ) if it doesn't get what it wants through the IWC process, and Mr McCully said the Government might do the same.
"We've made it clear that we're putting our efforts into the diplomatic process and if we don't find a good way forward, then we'll have to consider the ICJ route ourselves," he said.
As Mr McCully was speaking at a press conference in Auckland, in Wellington more than 200 people gathered outside Parliament with cardboard cut-out whale tails to protest against the IWC proposal.
Greenpeace New Zealand executive director Bunny McDiarmid said it was unacceptable.
The Government should start negotiating with other anti-whaling countries to see if they could broker a better deal, she said.
"We need to see an end to whaling in the Southern Ocean whale sanctuary, it's not good enough to just reduce it," she said.
Greenpeace wanted an end to all commercial whaling because it had wiped out some whale species and brought others to the brink of extinction.
The Green Party called on the Government to vote against the proposal.
MP Gareth Hughes said the future of whales hung precariously on the ability of campaigners over the next two months.
"This issue is dear to the hearts of New Zealanders and the public understand that they have the power to convince their government to protect the whales," he said.
"The IWC's so-called compromise risks undermining decades of consensus on protecting whales."
