Mike King has slammed Prime Minister Jacinda Ardern's decision to sign off on a $2.75 million gang-led drug scheme but not his Gumboot Friday charity.

The renowned mental health advocate posted a Facebook video on Monday night querying the controversial funding of the Central Hawke's Bay rehabilitation initiative, saying although he wasn't against the gang scheme, the Prime Minister's decision was "silly".

"When I asked you to have a conversation about it in the Koru Club, you looked me in the eye and you said, 'Mike I cannot get involved in this, we have a fair and equitable system and I cannot be involved in funding decisions'," King said.

"Yet today [Monday] you stood at the press conference and you took credit for signing off $2.75 million to the Mongrel Mob. I don't get it. Where is the fair and equitable process? Where is the honesty and transparency? For me, it's lost and you've been making these silly decisions for a long time now."

King this year handed back his New Zealand Order of Merit medal, claiming the country's "broken" mental health system didn't appear to have started changing.

His comments came on the heels of National Party and conservative critics labelling the rehab funding as "outrageous", "stupid" and a "sick joke".

The Kahukura programme, run by Hard2Reach and which aims to address trauma and drug-seeking behaviour through a live-in mārae in Waipawa, received the money out of Proceeds of Crime seized by police.

The H2R website describes a pilot of the Kahukura programme as being led by the Chaindogs, a cluster of Mob chapters with a common affiliation to the Notorious chapter of the Mongrel Mob.

Ardern on yesterday defended her and ministers Grant Robertson and Andrew Little's decision to sign off on the programme, and said a pilot had shown "signs of success", with strong court order compliance and drug testing results.

"We either make a decision to fund programmes which, yes, involve people with criminal history but we are determined to address their methamphetamine addiction, or we exclude people with criminal histories from meth addiction programmes."

• PM defends decision to sign off $2.75m of funding for Mongrel Mod-led rehab programme
• Andrew Little: None of the money signed off on is going to a gang

"It is very much focused on trying to address meth addiction and the crimes that result from that addiction."

Minister Little noted the programme had significant backers, including the Ministry of Social Development, Ministry of Health, Hawke's Bay police and Ngāti Kahungunu iwi leader Ngahiwi Tomoana.

"We are not going to arrest our way out of this problem," he said.

Sensible Sentencing Trust co-leader Darroch Ball said the "irony of the insult couldn't be greater", with police seizing $2 million in assets during a major drug bust in Hawke's Bay this year as part of an 18-month investigation targeting senior members of the Mongrel Mob.

Central Hawke's Bay Mayor Alex Walker said it was a "confronting issue".

"Meth is a scourge in our communities and anything that will remove its influence from our families is important."

She acknowledged government funding of a gang would not be "well received" by the community, adding: "I hope the funders have their eyes wide open".