Prime Minister John Key says the return of sacred Maori sites on two of 16 Crafar dairy farms are part of deal to sell them to a Chinese company.

The Government has approved the sale to Shanghai Pengxin following a recommendation by the Overseas Investment Office but a court is now considering whether the correct process was followed after an appeal by New Zealand-based rival bidders, Fay consortium.

Maori Affairs Minister Pita Sharples yesterday said two iwi with ancestral links to two of the farms were in negotiations to buy back the farms.

The chair of Tiroa and Tehape Trusts in the North Island, Hardie Peni, told TVNZ's Marae Investigates programme that documents were being drawn up regarding farmland containing its sacred sites, or wahi tapu, but the details of the deal were still confidential.

Key today said he hadn't had any official advice on the deal with iwi but he understood it was already part of Shanghai Pengxin's agreement.

"It was certainly transferring back those wahi tapu sites," he told TVNZ's Breakfast programme.

"Whether they are selling the whole farm back or just giving that portion if land back, I'm not sure."

The Government had followed the correct process when it approved the Chinese company's office, Key said.

"We've peer reviewed legally that we've applied the right test and we don't believe there's reasons for us to turn that deal down.

"Whether the courts overturn something, that's a matter for them. They've sometimes made decisions that surprise us."

It wasn't "all bad" for foreigners to own New Zealand land, he said.

Canadian country singer Shania Twain had planted trees, and developed access paths and cycleways, on the Coronet Peak Station, which she purchased near Queenstown.

"There are restrictions we can put on foreign owners we can't put on domestic owners."

- © Fairfax NZ News