Sir Anand Satyanand offered to withdraw as head of the Royal Commission into Historical Abuse in State Care and Care in Faith-Based Institutions.
Some have expressed concern about a perceived conflict of interest because of his Catholic faith.
Documents obtained by Stuff show Internal Affairs Minister Tracey Martin rejected his offer.
Instead, she asked Satyanand for a plan to combat any risk to the integrity of the Royal Commission.
Some child abuse survivors and their advocates are calling for Satyanand’s resignation offer to be accepted.
They say his position risks tainting the inquiry’s credibility.
On Friday, Martin said she had full confidence in Satyanand and the commission’s conflict of interest policy.
“Sir Anand was appointed when the Royal Commission’s terms were only about abuse in state care. He conducted the consultation process and recommended to the Government that the inquiry also cover faith-based institutions,” she said.
“He thought that his Catholic upbringing and background were well-known, but made a point of raising this matter as he wanted to be transparent.”
She said he did “the right thing” raising it, and an atheist chair “would be a potential conflict too”.
Satyanand first outlined concerns in a September letter to Martin.
“I … think it’s appropriate to establish that you know I am a practising Catholic by religion. I was brought up in a Catholic household and went to Sacred Heart College in Auckland.
I have kept up associations with that school and have attended a number of its public occasions there through the years.”
He was involved in a patron’s group which helped raise $9m to rebuild Wellington’s St Mary of the Angels church.
Satyanand is a former lawyer, judge and ombudsman. He was the 19th Governor-General of New Zealand, from 2006 to 2011.
After returning to civilian life, Satyanand chaired the Commonwealth Foundation for two two-year terms, ending December 2016.
He led the Commonwealth team observing the national elections of the Independent State of Papua New Guinea.
Satyanand also chaired a commission set up by the Anglican church to develop options on the ordination and blessing of people in same-sex relationships.
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