I am living in NZ and wish to renew my British Passport. When I go onto the UK Government site the format which must be followed asks for payment in UK pounds which I don't have.
I am certain this problem can be easily overcome can you help me please ?

How were you planning to do the transfer of funds, regardless of type?
Generally online conversions are done for you by the site, and the rate changes daily.
You can go to any bank for conversion, if you are signed up at your personal bank for bankwire.

You can go in person to the embassy and do it in person. Most online bank payments will merely convert the money, An example, I pay in Chinese RMB from my American bank, they merely convert it.

Or of course if they demand it be paid that way, have someone in the UK make the payment for you