Winston Peters is pledging support for NZME's bid to purchase Stuff, under a "Kiwishare" arrangement that would protect Stuff's editorial operations.
Peters, the Deputy Prime Minister, also launched an attack on the current state of journalism in New Zealand, saying it's "not trending well".
The New Zealand First leader confirmed in a press conference that he has been lobbied by NZME - the owner of the New Zealand Herald and Newstalk ZB - to further its chances.
The "Kiwishare" model would be a similar arrangement to the one used in 1990 when the Government stepped in to protect free local calls when Telecom - now branded as Spark - was privatised.
"There are a range of matters going before the Government which require serious thought and discussion and they require a decision soon... A pressing matter is a fresh bid by NZME to purchase Stuff from Australia's Nine," Peters said.
"A proposal has been put forward for the Crown to participate through a Kiwishare arrangement in a new subsidiary to protect Stuff and all of its editorial staff... The Kiwishare proposal is worth considering carefully."
NZME tried to purchase Stuff in 2016 but the Commerce Commission declined the application in 2017 over concerns of lack of market competition and job losses.
"We have been cautious about supporting a proposal which could be seen as a workaround of previous Commerce Commission rulings," Peters said.
"As part of the Kiwishare concept, a set number of print titles will remain open operating during the duration of the agreement... This will assist in stemming the dramatic decline in the number of reporter jobs over the immediate future."
Peters said despite the Coalition Government's support, NZME would still need to seek Commerce Commission approval of the Kiwishare concept.
He said it's now up to Broadcasting Minister Kris Faafoi to bring it before Cabinet.
The Deputy Prime Minister acknowledged the role of the media, pointing to recent reporting on the Whakaari/White Island tragedy and the aftermath of the storm in the South Island.
"My party's fundamental position always has been - and remains - that a fourth estate is essential, although the state of the news media is in dire straits."
Peters launched into an attack on the current state of the media, saying barriers to protecting media organisations "were broken by a neoliberal experiment for which we still pay the price today".
He said while the digital revolution has had advantages, the shift in advertising revenue from the traditional outlets to Google and Facebook is "suffocating" the industry.
"Advertising revenue is bleeding out of our newspapers, numerous community titles have closed or are being sold, and regional reporter numbers have dropped dramatically," Peters said.
"Newshub can't find a buyer while TVNZ is not paying a dividend to the Crown... It's not clear that a country of our size is coping with the digital media shift."
Peters said the news print businesses were once "economic powerhouses in our country" and described them today as "sunset industries".
"The consequences of the digital shift on quality journalism are at times manifestly obvious on the front pages and websites... There are trends in journalism that are not serving New Zealand well.
"Our media walk through the door with a predetermined narrative and then repeatedly ask questions to fir that narrative... that is called confirmation bias and it is prolific."
Peters also expressed concern about "fake news".
A reporter asked the New Zealand First leader for his thoughts on politicians using the term "fake news" to push back on stories that don't fit their narrative.
Peters responded by asking for an example.
US President Donald Trump frequently attacks media outlets like the New York Times and CNN for reports that don't paint a favourable picture of him.
Peters is currently facing allegations that the New Zealand First Foundation appears to have been taking political donations and operating as a "slush fund" for the New Zealand First Party.
He denies the claims.
The Electoral Commission is investigating.
ACT leader David Seymour is branding Peters' support for the NZME-Stuff merger "deeply suspicious".
"Serious questions need to be asked about Peters' motivation," Seymour said.
"Why would NZ First seek to protect a media organisation that has spent the past few weeks questioning whether the NZ First Foundation is breaking the law?"
