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The national cycleway is now expected to be a network of significant rides that could be linked up over time.
Officials have finished a proposal that is due to be discussed by Prime Minister John Key and his Cabinet today.
The concept of a "network" is heavily modified from Mr Key's original vision of a continuous concrete path running from Kaitaia to Bluff.
Cycle advocates who assisted the Ministry of Tourism with the proposal told The New Zealand Herald the network would include existing routes like the Otago Central Otago Rail Trail, and pick up significant planned cycleways as well.
Mountain biking guide author Jonathan Kennett said he believed the Government's role would be one of "supporting" the network rather than developing it outright.
Mr Kennett said the Government would back proposals that were ready to go, such as a cycleway from Queenstown's Lake Wakatipu to Bluff, then assess other opportunities later.
He said the Government would likely take a role in overall promotion and publicity of the network.
Bike NZ's development manager John Willmer said he believed the Government would take a "hard-line business return" angle when deciding what trails would be in it.
"[The Government] might say: 'Bring us your plans for the trail and bring us the plans for the businesses you are going to develop around it'."
Mr Willmer said Government selection would be discrete, starting with supporting seven high-value riding opportunities.
He said the rides would be community-driven initiatives, to avoid the Government having to designate a specific route, which would have effectively created winners (on that route) and losers (in excluded areas).
"That means you are not ruling out any community saying: `We want a piece of this action'."
Mr Willmer said he understood the Department of Conversation was working on a proposed cycleway from Cape Reinga, which along with the Lake Wakatipu-Bluff route, could provide "symbolic" starting points at each end of the country.
Cycling Advocates' Network co-chairman Axel Wilke said the individual trails did not have to be owned by councils, but by private trusts.
Finance Minister Bill English has confirmed there will be funding for a national cycleway, although it will be less than the $50 million estimate originally ventured by Mr Key.
Planning consultant Mike Barnett, who researched the Lake Wakatipu-Bluff route on behalf of Venture Southland, said the Ministry of Tourism had found "the practical thing was a network of excellent cycle opportunities in New Zealand which may lead to bigger things later."
Mr Barnett said the network could be totally inter-linked "in 10 or 20 years' time".
Mr Barnett said the Lake Wakatipu-Bluff route could be ready in time for the 2011 Rugby World Cup, as research had been under way for three years.
The Ministry of Tourism could not be reached for comment.