The Waitangi Tribunal has suggested the Government hold off on selling shares in state-owned energy companies until the issue of water rights is resolved.

The Government will take time to consider the Waitangi Tribunal finding, but will not re-litigate its arguments, Prime Minister John Key said.

Key said he would get a variety of advice on the issue, and meet with the Maori Party, before responding to the report.

"We want to act in good faith and let the process run its course, but in the fullness of time we will respond to the Waitangi Tribunal.

"We owe it to the Tribunal and to interest parties to consider that very much in good faith and very carefully."

However, Key said he was standing by his past comments that no one could own the water.

"I'll make sure that in the fullness of time we come back with a full response of what we intend to do, but the time now really is for us to consider the report rather than to re-litigate all the things I've said in the past."

TRIBUNAL FINDINGS

The Maori Council initially lodged a claim with the Tribunal claiming Maori had ownership rights over water and called for planned partial asset sales to be stopped until they could argue the matter.

The Tribunal said today that the sale of shares under the Mixed Ownership Model could cause significant disadvantage to the Maori Council, and supporting hapu, if their claims were found to have merit.

State Owned Enterprises Minister Tony Ryall confirmed Government had received the report and would consider it over coming days.

It would also meet with the Maori Party after earlier promising to do so on the issue.

"In the meantime, ministers are not in a position to comment on the Tribunal’s direction further at this time," said Ryall.

Delaying the public offering could have significant implications for the Crown who have stressed the complicated and detailed work in preparing such a share float.

"They have also submitted that the sale of shares in the power-generating Mixed Ownership Model companies is a major policy initiative of the current government."

In it's report on Wai2358, the Tribunal said that for these reasons they preferred the "maintenance of the status quo".

This meant the Crown would continue to own the companies until Maori claims to water ownership had been resolved.

"We therefore conclude that the Crown ought not to commence the sale of shares in any of the Mixed Ownership Model companies until we have had the opportunity to complete our report on stage one of this inquiry and the Crown has had the opportunity to give this report, and any recommendations it contains, in-depth and considered examination."

However, the report said that was an "interim direction" rather than the full recommendations sought by the claimants.

The Tribunal was not able to make such a recommendation before deciding whether the claim was well-founded under the Treaty of Waitangi Act.

They release a report of the first stage of the hearing in September.

An urgent hearing of the Tribunal ran for two weeks in Waiwhetu Marae in Lower Hutt earlier this month.

"Given Treaty rights of a proprietary nature have been found to exist in specific freshwater bodies in previous Tribunal reports; the Crown has acknowledged that Maori do have rights in fresh water generally; and New Zealand's Court of Appeal has left open to question the nature and extent of such rights and interests; these issues warrant serious inquiry," the report today summarised.

The question of Maori ownership was "not an implausible one" and if the Crown altered its ownership of freshwater resources it may limit their ability for redress.

"Putting it another way, they are serious issues to be inquired into."

The Crown had said it could buy back shares in the mixed ownership model, but that was only a partial factor, the report said.

"As the shares, once sold, can only be repurchased from a willing seller and may require a prohibitively expensive outlay."

Or the Government would have to pass legislation compulsorily returning the shares to Crown ownership.

"The sale of shares in Mixed Ownership Model companies could therefore cause a significant disadvantage to the claimants, were their claims to be determined to be well founded by the Tribunal."

Maori Council lawyer Donna Hall was "very pleased" with the Tribunal’s recommendation and said it indicated: "Maori proprietary interests to water resources is a serious issue".

SALE OPPONENTS

Mana Party leader Hone Harawira said the Tribunal's announcement was a "first significant step in shutting down the government’s plan to sell our power companies".

"The question now is whether the government will listen to the Tribunal and halt the sale of state assets or whether they simply spit in the face of the Tribunal like the Prime Minister said he would."

Labour leader David Shearer said the Tribunal's report should be a wake-up call for National.

"It's short-sighted determination to flog off our assets is wrong. It’s not in our national interest and should be abandoned altogether."

The asset sales had become a complete train wreck with spiralling costs and it was entirely National and John Key's fault, he said.

Green Party co-leader Russel Norman called on the Government to heed the recommendation and stop the asset sales.

"Government must uphold the mana of the Waitangi Tribunal and not proceed with asset sales to give the Tribunal time to make its full findings."

Progressing now would invite expensive litigation from the Maori Council and iwi, he said.

"The debacle over water rights is another reason – on top of the rising costs of sales and their negative impact on the economy – to drop asset sales altogether."

- © Fairfax NZ News