Foreign Minister Winston Peters will meet the revered Buddhist icon, but only in his private capacity as leader of the New Zealand First Party.
"The Dalai Lama is not a head of government, I don't meet every visitor to New Zealand," Clark said.
"He is no ordinary spiritual or religious leader either, you can see that by the way in which controversy surrounds these visits," Clark told TV One's Breakfast program.
China, which rules Tibet, objects when any government representative meets the exiled Tibetan Buddhist leader. New Zealand currently is negotiating a free trade agreement with China, expected to be the first China will sign with a western-style economy.
Beijing regards the 71-year-old Buddhist monk as a beacon for pro-independence sentiment in Tibet, which China rules, although the Dalai Lama has repeatedly said he seeks only autonomy for the region.
"Dalai Lama is not a simple religious figure, he is a political exile engaged in 'splittist' activities for a long time," Chinese Foreign Ministry spokesman Qin Gang told reporters in Beijing last week.
China was firmly against any country that allows the Dalai Lama to visit to push for Tibetan independence, he said.
Shortly after his meeting with Clark last week the Buddhist priest repeated his position that Tibet should be granted autonomy within China, not full independence, to preserve its language and culture.
The Dalai Lama also met with Australian Prime Minister John Howard and main opposition Labor Party head Kevin Rudd.
New Zealand minority Green Party said Clark was bowing to diplomatic pressure from China by refusing to meet the Buddhist priest.
"It is demeaning to see our prime minister being pushed around by the Chinese government," he said.
Clark again rejected the claim, saying that her government continually raises human rights issues with China, including the treatment of people in Tibet.
"We always have it on our agenda when we go, and there's seldom a meeting that I would have with top Chinese government people when these issues aren't raised," she said.