Labour is accusing the government of promising land in Auckland for housing that it doesn't own.

Labour MP Phil Twyford says a two hectare plot of land in central Manukau is in fact mostly owned by the Auckland Council.

He says only 10 percent of the land is actually owned by the crown, the rest belongs to the council which has its own housing plans for it.

"This is just the latest fiasco really in what's been a string of kind of failure and incompetence in relation to what was the government's centrepiece housing announcement in the budget."

The Auckland Council has told the New Zealand Herald it would be prepared to work with the government on developing the land, but it should support a mix of offices, shops and apartments.

Auckland Deputy Mayor Penny Hulse says the flagged land is part of a metropolitan centre and far too valuable to be restricted to residential development.