Prime Minister John Key says court action by Maori challenging the Government over water rights has suffered a "crushing defeat".

In his ruling yesterday, High Court judge Ronald Young found against the Maori Council and the Waikato River iwi on all points in their bid to block state asset sales until water rights were resolved.

The iwi and Maori Council have said they will appeal against the decision.

The Maori Council's appeal may go straight to the Supreme Court but if it fails then it will clear the way for the sale of up to 49 per cent of Mighty River Power - the first of four energy companies to be partially sold.

Key this morning said it was hard to believe an appeal against it could have any impact on the decision.

He described the ruling as a “crushing defeat” for the groups.

“It wasn't just that they lost. They lost pretty much on every point,” he told Radio New Zealand.

It was their right to appeal but Key said he didn't expect the ruling to change.

“In principal, the Supreme Court could always overturn the High Court but it's hard to believe they're going to when you look at how significant the defeat was and how comprehensive the defeat was.”

He said the assets may be partially sold as early as the first quarter of next year.

Lawyer for the groups, Donna Hall, said a decision on whether to go direct to the Supreme Court depended on the Crown's timetable.

Justice Young found that the Crown would not be acting inconsistently with the principles of the Treaty and there was no connection between the sale of shares and the need to provide for Maori claims to proprietary rights in water.

He also found the decisions were not based on the proposition that "at common law no-one owned the water".

- © Fairfax NZ News

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