Labour and the Greens will go ahead with their own inquiry into homelessness, despite National seemingly pulling support for it.
They've accused the Government of putting politics before people.
"The country has been shocked by the recent rise in homelessness," Labour leader Andrew Little says.
"No New Zealander feels good about children sleeping rough and families living in their cars."
Social Housing Minister Paula Bennett was asked by Labour's Phil Twyford in the House on Wednesday if she would support the investigation.
However, she said the Government was already doing work on the problem.
"We have a range of initiatives, some which are already implanted, some which we are implementing and some that are still in the negotiating stages - all of which will make a huge difference in the issues of homelessness and emergency housing, and that's what we want to concentrate on," she said.
Mr Twyford then asked whether she'd influenced her caucus colleagues on the Social Services Committee to vote against the proposal, considering "they'd been supportive" of it before.
"I didn't instruct the caucus to do anything. We had a discussion and we came to it as a collective," Ms Bennett replied.
Nevertheless, Labour and the Greens will soldier on with the investigation, which will include hearings in a number of main centres for public submissions.
Mr Little welcomed the involvement of any other political party which wanted to join the cause.
"It is disturbing that National MPs on the committee were supportive of our proposal, but they appear to have been slapped down by the Prime Minister who ruled out an inquiry on Monday," Mr Little says.
Greens' social housing spokeswoman Marama Davidson says the Government could have supported a cross-party inquiry but instead have "chosen to ignore" the problem.
"You only have to walk along Courtenay Pl and Queen St to see that homelessness is growing in this country and, as MPs, we can't stand by and watch that happen," she says.
"I have seen first-hand how serious the homelessness crisis is, but the Government is refusing to take any meaningful action, and people are hurting."
Under questioning by her in the House this afternoon, John Key said the rate of homelessness had increased under his prime ministership.
The plight of the homeless, including those living in their cars has come to the fore over the past few months.
A number of protests and support events have been held across the country in which people with homes spend the night in their cars.
Mr Little says the idea for the inquiry initially came from the Coalition to End Homelessness - a group of NGOs working with the homeless.