Wellington, Oct 21 NZPA - A government working group set up to look at tax reform has been compromised because one of its members is linked to a recent court case involving tax avoidance, the Green Party says.

Co-leader Russel Norman said in Parliament today that tax expert John Shewan had provided Australian-owned Westpac bank with tax advice before it w as taken to court by the Inland Revenue Department (IRD).

Part of the advice was to use tax reduction measures involving a reduced rate on profit, Dr Norman said.

The High Court judgement said part of that advice was recommending Westpac pay sum which represented a rate of only 6.5 percent against reported profit .

IRD claimed Westpac owed over $900 million in taxes and interest and the court ruled in the department's favour this month.

Westpac disputed the claim and is considering appealing, while Mr Shewan told NZPA today the allegations against him were "completely unfounded".

Dr Norman said the outcome of the case showed that "members of the group set up to reform the NZ tax system have been actively involved in promoting tax avoidance to assist overseas-owned banks".

He said the composition of the tax working group was too skewed towards those working for corporate interests and not representative of New Zealand society.

Questioned by Dr Norman on the issue today, Finance Minister Bill English said the members of the working group were appointed by Victoria University.

He said he didn't have concerns about the structure of the group or the advice they may give.

"Regardless who (the working group members') clients are, their advice to government will stand or fall on the merits of that advice", he said.

Several other banks have been caught up in similar disputes and are involved in court action.