But Hodgson said the error was not a sacking offence and the panel had boosted the reputation of NZ's sharemarket environment.

"As far as suggesting it was an error sufficiently serious that they [the panel] should be sacked or that [chairman] John King should not be reappointed, we would simply balance it up against the totality of the rest of their activity over the period," he said.

But the government believed the panel had made a mistake – a point the panel members more or less conceded themselves, he added.

Industry commentators said the panel was stricter with the next major energy acquisition application – Auckland network company Vector’s takeover of NGC Holdings.

The panel twice knocked back Vector’s bid for Australia Gas Light’s 66.05% stake in NGC. It first refused Vector to buy Australia Gas Light’s New Zealand holding company that owned the majority stake in NGC, though that is what Origin Energy had done a few months earlier when it purchased Edison Mission Energy’s controlling stake in Contact Energy.

The panel then declined an application allowing Vector to give NGC shareholders preferential entitlement in its planned IPO later this year. However, Vector later successfully acquired AGL’s 66.05% stake in NGC and its offer to other shareholders closes this Friday.

Prime successfully argued to the panel that putting the complex bond-cash offer to a small number of overseas shareholders (at that time under 1%) would be very costly. The panel granted the exemption, though it did not anticipate the subsequent torrent of Powerco share trading which saw a phenomenal 160 million-plus shares change hands.

Sharebrokers and Powerco independent adviser Grant Samuel did not view the Prime bonds-cash mix as equivalent to the cash only offer and speculators swooped in, buying Powerco shares at less than the NZ$2.15 bid price before onselling to Prime for a profit.

"In general we are satisfied that the Takeovers Panel [which has so far completed over 20 rulings] has been a really useful addition into clearing up the reputation of the New Zealand sharemarket scene," Hodgson said.