David Bain is seeking a judicial review of the way Justice Minister Judith Collins handled his bid for compensation.
Bain's lawyer Michael Reed QC confirmed that Mr Bain, who is seeking compensation for wrongful conviction after spending 13 years in prison after being convicted of murdering his family, had launched the judicial review.
Ms Collins last year canned a report into Mr Bain's conviction by retired Canadian judge Ian Binnie which recommended he receive compensation.
A peer review by Robert Fisher QC which Ms Collins had requested found Justice Binnie's report was "fundamentally flawed".
A statement from Mr Bain's long-time supporter Joe Karam alleged that Ms Collins had breached Mr Bain's rights to natural justice, abused her power, acted in bad faith and acted in a biased, unreasonable and predetermined manner.
Ms Collins said yesterday that she would take recommendations for new options to decide Mr Bain's claim to cabinet next week.
Ms Collins said in a statement today she has taken steps to ensure the process is fair and proper throughout.
“Put simply, it would be unacceptable for cabinet to base its decision for compensation on an unsafe and flawed report. That would not have resulted in justice for anyone, let alone Mr Bain.”
Ms Collins said she was considering his request to put his application for compensation on hold.
Mr Bain was jailed after being convicted in 1995 of killing his father, mother, brother and two sisters at their Dunedin home.
The Privy Council quashed the convictions in 2007 and in 2009 Mr Bain was acquitted at a retrial.
The Government is not obliged to pay compensation but Mr Bain could receive about $2 million if a formula used by the Government in its last compensation payment is followed.