Court action against Japan over whaling could fail and put anti-whaling countries in a worse position, New Zealand's representative to the International Whaling Commission (IWC) says.

Australia has threatened to take a case to the International Court of Justice if diplomatic measures this year aimed at stopping Japan whaling in the Southern Ocean fail.

New Zealand is considering a compromise and Commissioner Sir Geoffrey Palmer said if that was reached more whales would be saved, while taking a case to the ICJ could be counterproductive.

"We regard that as a very uncertain proposition at all, and if that case were lost the situation would be worse than it is now," he said on TVNZ's Question and Answer programme this morning.

Recently IWC nations met to talk about a proposal to allow Japan, Norway and Iceland to openly hunt whales despite a 1986 moratorium on commercial whaling, but aim to reduce the total catch over the next 10 years. Japan currently uses a loophole to kill whales saying it is for scientific research while the other countries are not bound by the moratorium as they did not agree to it.

Australia has ruled out backing the compromise saying all whaling in the Southern Ocean should be phased out within five years.

"We don't want any whaling in the Southern Ocean, we don't want any commercial whaling," Sir Geoffrey said.

"The difficulty is that if you approach this matter like it's an issue of religious zeal you don't get anywhere because we have no way of enforcing our will. If this is going to work, this whole negotiation, there have to be some compromises on both sides."

The next IWC meeting is in Morocco in June.

Japan, Norway and Iceland issue permits allowing them to catch about 3000 whales a year and about 1600 were killed commercially. However Sir Geoffrey said the yearly kill figure was 13,500 before the moratorium.

Sir Geoffrey said the IWC was completely dysfunctional and if no agreement could be reached it would collapse.

If the proposal was agreed to it would not lift the moratorium but would qualify it to allow a set number of whales to be killed.

"What I am saying is that we want fewer whales, many fewer whales killed than are being killed at the moment, Let's look at the facts, let's be realistic, let's not be emotional."

Foreign Minister Murray McCully has previously said that any deal on allowing whaling would have to be very attractive and reductions significant to get New Zealand support.