The owners of Lochinver Station say shutting down the sale of the farm to a Chinese company will have huge ramifications for New Zealand, but the Government disagrees.
The $71 million sale of the 13,800ha farm, to Shanghai Pengxin was declined today because it didn't provide enough benefit to New Zealand.
The company, owned by Chinese billionaire Jiang Zhaobai, had applied to buy the farm around half an hour out of Taupo.
In a statement this morning, the ministers say the benefits of the sale to New Zealand were "not substantial and identifiable".
The Overseas Investment Office (OIO) actually recommending approving the application, saying the question of whether the benefits could be proven was "finely balanced".
The station is classified as sensitive land under the law, and ministers must consider whether the application meets all the requirements of the Overseas Investment Act.
In this case it hasn't, Ms Bennett says.
"After detailed and careful individual consideration, we are not satisfied there will be, or is likely to be, a substantial benefit to New Zealand – a key requirement for the applications of sensitive land of this size."
Ms Bennett says the potential jobs created would only be a few contractors and one part-time position, and wasn't worth it in comparison to the farm's size which is around 35 times larger than other farms.
She denied the decision was made based on public and political pressure.
"I have no qualms telling you I made the decision in the best interest of New Zealand."
The potential sale had been the subject of political controversy extending back the last year's election, with Labour and New Zealand First against the deal.
Because the proposal was for the land to change hands to an overseas owner, it was subject to the approval of the OIO.
The OIO referred its recommendation, made under Shanghai Pengxin's wholly-owned subsidiary Pure 100 Farm, to the two ministers before Easter.
But Pure 100 disputes the dismissal of the gains to be made, saying its improvements to its existing assets are "well known".
This includes more than $18 million in investment in Crafar farms to improve productivity.
"We are surprised and extremely disappointed and will be considering our options."
Stevenson Group, which owns Lochinver Station, is also disappointed by the outcome and the process.
"At this stage I'm not sure we agree with the assumptions used or the way the criteria has been applied – certainly the assumptions that have been used do not reflect our reality," chief executive Mark Franklin says.
He's concerned it took 14 months to reach a conclusion and believed it not going ahead will have significant impacts for New Zealand, particularly in international relations and trade.
But Ms Bennett didn't think that to be the case, saying declining the sale should be seen in the context of all the sales that have been approved.
Labour's finance spokesman Grant Robertson says the OIO has made its first right decision since National changed criteria around foreign land sales in 2012.
"It appears the only reason Lochinver was blocked is heightened media attention. It's unfortunate that other sales without similar attention are being waived through," he says.
The reasoning behind the decision has left NZ First deputy leader Ron Mark questioning the gains of other overseas sales that have been approved.
"The National government has merrily ticked off over a million hectares of land to foreign buyers, and none of those sales add substantial benefit for New Zealand."
He also queried the benefit of Shanghai Pengxin being allowed to buy the 16 Crafar and 13 Synlait farms.
The Green Party wants the law changed to ban the sale of farmland over five hectares to offshore interests.
Primary industries spokesperson Eugenie Sage says the OIO should distinguish between new investment in sustainable enterprises and buying existing businesses to export profit.
Federated Farmers says the decision is a positive one and while New Zealand needs foreign investment, it should demonstrate the gain for the country.