Te Pāti Māori says it will not stand a candidate in the upcoming Tauranga by-election because of the threat from white supremacists.
The election is to replace former National Party leader Simon Bridges, who is retiring from politics.
Te Pāti Māori president Che Wilson said its co-leaders had been the recipient of threats and hate speech by Tauranga residents.
"The first hate-speech conviction and the belittling of te reo Māori at a public event took place in Tauranga.
"Residents have been subjected to white supremacist leaflet drops, and even our co-leaders have been the recipient of threats and hate speech by Tauranga residents," Wilson said in a statement.
He said Tauranga was a hot spot for white supremacists on social media.
"We know Tauranga Moana is an amazing place, rich with history and there is hope ... but sadly, this is politics and the race card will mean that Māori will be used by some as a political football and we are unwilling to expose our people to that rubbish" Wilson said.
Wilson said the decision not to stand a candidate was a safety issue.
Labour candidate in the by-election said Tauranga has seen issues with racism, but is defending the city's diversity.
Jan Tinetti said she was sad the Māori party felt the way it did.
She said she had seen instances of racism and white supremacist posters.
"Everywhere I go people say they don't think this reflects the Tauranga that they know, so let's do something about that, let's actually stand up and say that's not good enough and what are we going to do about it? So I think the first instance is bringing everybody to the table."
ACT leader David Seymour said Te Pāti Māori had insulted an entire electorate with claims it was unsafe to stand a candidate due to racism and hate speech.
While in Tauranga on the election campaign, Seymour said it was ironic for Te Pāti Māori to group a whole electorate as racist, as it goes against the party's stance on typecasting and stereotyping.
Seymour said he was glad the party was not standing in the election there.
The by-election is on 18 June.