The Department of Conservation has imposed strict rules on shark cage diving operations around Stewart Island.
A great white shark, photographed off the coast of Stewart Island Photo: SUPPLIED
The new rules will restrict the operations to one area and ban the use of bait feeding and decoys to attract the great white sharks.
A petition by Stewart Island residents to Minister of Conservation Maggie Barry to ban cage diving altogether has failed.
Instead, restrictive permits will be imposed on the operations.
The Department of Conservation's Southland director Allan Munn said the new two-year permits would protect the great white sharks while minimising potential conflict with other commercial divers.
The most important change is that the shark cage divers will be in one place, he said. "And that place is Edwards Island which is about 10 kilomertres from Halfmoon Bay."
Cage dive operators will also not be able to feed the sharks or put out decoys in the shape of seals and humans.
DOC was worried the cage diving, which gives people the chance to get in the water with the sharks, was altering the animals' behaviour.
Shark Experience owner Mike Haines said he was happy about the new permits.
"Well we don't feed them... that's just a fallacy. Yes, we were using a decoy of a baby seal, we can't do that any more. But that's life and that's something we can talk to DOC about later on," Mr Haines said.
But recreational divers were not happy with DOC's plan - including Dive South Dive Club President Jono Bavin, who wanted a ban on cage diving altogether.
He said he appreciated the new permits would be reviewed in a year and would work with DOC to try and convince them the practice should be outlawed.
Storm Stanley, chair of paua industry group PauaMAC5, said cage diving should be outlawed altogether.
There had been reports of sharks attacking boats since cage operations began in Stewart Island, and paua divers and recreational swimmers were afraid to enter the water.