Niue will not raise the New Zealand flag or sing its anthem during constitution day celebrations later this month as has been customary in the past.
MP Terry Coe said the move was revealed in Parliament last week when the Premier, Sir Toke Talagi, was questioned.
Mr Coe said Sir Toke made the decision to strike out at New Zealand over its concerns with Niue's auditing processes.
He said Niue should acknowledge its ties to New Zealand.
"It's not a good thing that we're breaking away from tradition and also that we're New Zealand citizens, so why not raise the flag and sing the national anthem?"
Mr Coe said some MPs fear it could mean Niueans losing their constitutional right to dual-citizenship with New Zealand.
"People will not support independence if they're going to lose their New Zealand passport.
"That passport has got a really strong feeling for the people and they don't want to lose that," Mr Coe said.