The Government could be millions of dollars out of pocket after a banking error saw a bulk funding education payment go out twice, by accident.

It has been reported that Government officials initially feared the total amount taken out of the Government accounts totalled $1.2b, however after further investigation it became apparent the error was not as bad as initially feared.

It's not clear exactly how much the error, which has left Westpac scrambling, cost.

But reports indicate Westpac is working on the issue.

The payments are understood to be part of a bulk funding payment to early childhood education providers.

It's believed no individual teachers were affected, and any providers that were overpaid would not have had the money for a significant period of time.

The payments that should have gone out totalled $669m, but were made up of smaller payments - many, but not all, of which were paid twice.

Education Minister Chris Hipkins was quoted as saying he was aware of the mistake, which he also said had since been corrected.

"I have been assured Westpac has not reversed the payments and there was never any liability for the Ministry."