The Government is under pressure to allocate Maori shares in the part-float of state-owned companies to keep its assets sales on track.
But a delay seems inevitable after the Waitangi Tribunal announced yesterday that Maori have proprietary rights in water and said the partial sale of state-owned energy companies should be put on hold to protect their interests.
Going ahead with the part-float of Mighty River Power, Genesis Energy and Meridian Energy without allowing for Maori rights would be in breach of the Treaty of Waitangi, it said.
Prime Minister John Key said the Government would consider the findings in good faith and respond after taking advice from officials and Crown lawyers.
"We'll go through the merits of the argument and in the fullness of time we'll come back with a response." He has also promised to discuss the Government's response with the Maori Party before making it public.
Maori Party co-leaders Tariana Turia and Pita Sharples said they would not be making any comment until they had discussed the report with claimant groups and the Government.
The Government is under a self-imposed deadline if it wants to get the first of the companies to market before the end of the year.
Mr Key has said a delay would push out the whole programme.
That leaves a matter of weeks to consider the response and come to an agreed compensation package before Mighty River Power's share float is made final.
In a strongly worded summary of the report, Chief Judge Wilson Isaac said the Crown would not be able to recognise Maori rights after it sold shares to private investors.
"We consider that the sale must be delayed while an accommodation is reached with Maori."
Shares in the companies would go some way to remedying Maori proprietary interests, he said. But shares alone were not enough.
That's a blow for the Government which until now has said no one can own water.
Ngati Rangi claimant Toni Waho said it had been made clear that Maori had rights, so now both sides had to agree on how to compensate them.
"The asset sales were going ahead in the belief that there was not a proprietary right, now that we have an acknowledgment in law we can deal with this."
Maori Council deputy chairwoman Rahui Katene said the claimants reserved their right to take the matter to the High Court but that was a last resort.
The findings vindicated the claim, she said.
The tribunal said the claim was "not opportunistic" and the recognition of Maori water rights could no longer be delayed.
It recommended an urgent national hui be held at Waiwhetu Marae in Lower Hutt for all sides to discuss the matter.
Green Party co-leader Russel Norman said the tribunal's report meant there was no way the asset sales could go ahead this year.
Labour leader David Shearer said the asset sales process was in an utter shambles and should be stopped.
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