UPDATED 5.27PM: The Government said it was caught between a rock and a hard place when it decided to let 27 fraudulent refugees stay in New Zealand.

The individuals were stripped of their refugee status, but are still citizens.

Internal Affairs Minister Peter Dunne said the cases were from the 90s, and some have children who were born here.

"Some would be stateless if we were to deprive their citizenship of them now - from natural justice points of view its not a logical thing to do."

Earlier today, immigration spokesperson Sue Moroney said she had seen documents that show Internal Affairs had removed the refugee status of 27 people, because it was applied for on fraudulent grounds.

But all 27 will be allowed to stay in New Zealand.

Sue Moroney said she doesn't understand why this is.

"In terms of keeping the integrity of our refugee system and our citizenship system, the Government needs to disclose more details about what the nature of this fraud was. It's hard to say what the decision should have been without knowing those details."

She said that's a kick in the guts to refugees with genuine claims.

"We only take 750 refugees every year and in this instance there are 27 genuine refugees who have missed out on the opportunity to build their lives here in New Zealand."