UPDATED 1.31PM: Opportunities Party founder Gareth Morgan has heavily criticised New Zealand First this morning at Ratana, using a racial epithet to describe its leader Winston Peters.

LISTEN ABOVE: Winston Peters and Gareth Moran speak with Larry Williams

Morgan, an economist, challenged Ratana followers to call out Winston Peters and his party who he claims do not support Māori, and has effectively labelled the party racist against Māori.

Morgan's went further, calling Peters an "Uncle Tom" - possibly one of the strongest and most inflammatory insults that could ever be laid at a Māori person on a marae.

"I cannot understand why Maori don't stand up and call Winston out for being nothing more than an Uncle Tom - an envoy of the 'Kiwi not Iwi' fringe."

There was an audible gasp from the audience attending.

'Uncle Tom' is a racially-charged epithet once used to describe slaves in the pre-abolition United States who were considered too subservient to their owners.

He also compared Peters to former ACT Party leader Don Brash, saying they were "black-and-white facsimiles of each other".

Peters hit back instantly: "Excuse me for laughing, but it's a long time since I have been ravaged by a toothless sheep," he said.

He added that Morgan was another rich man trying to enter politics, describing him as a "a thinned-out version of Kim Dotcom".

READ MORE: Leaders declare a new Maori movement, but Labour not concerned

Morgan formally registered his party in early January and is targeting the 5 per cent party vote threshold to enter Parliament.