Just because you don't find the word pakeha offensive does not mean that I do not Alan, I vaguely remember another topic featuring the word whore and you being offended by it, and others including me not. Different strokes for different folks eh.
Here's a great article on the word pakeha;
http://maorinews.com/writings/papers/other/pakeha.htm
Makes it seem that your senior and respected friend didn't quite know the actual meaning either Alan....
Also I know it doesn't confirm the word meaning white pig but that is what I learnt it meant growing up so in my mind it will always be associated with that. Some people also use it thinking that is what it means so it can be used as a derogatory comment.