The Prime Minister says he is "extremely confident" the Maori Party will remain in the coalition Government despite its threats today to pull out over the sale of state owned assets.
Maori Party co-leaders Tariana Turia and Pita Sharples say they are unhappy a treaty clause may not be applied to asset sales that are up for partial sale, and said they would "consider their position in the Government" if it is not included in new legislation.
The Government is set to start consulting with iwi next week over the partial sale of state assets and whether section nine of the State Owned Enterprises Act should apply to the partially owned companies.
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Section nine states that the Crown must not act in a manner inconsistent with the principles of the Treaty of Waitangi.
John Key said the consultation over the asset sale plan is in a very early stage but there are certain issues that need to be addressed.
"The problem we've got is that private sector companies and private sector shareholders in New Zealand are not subject to the treaty, the treaty binds the Crown and Maori," he said.
"The Crown is not looking to discharge its obligations under the treaty but we can't bind a private sector shareholder, we need to find a technical way through that."
The SOEs up for sale include Genesis Energy, Meridian Energy, Mighty River Power and Solid Energy and under new legislation the Government will retain at least 51% ownership, with individual shareholdings limited to 10%.
Key said section nine of the SOE legislation was "largely symbolic" because it had not been enacted since it was drawn up in 1986.
But Sharples said the issue was of great significance to Maori.
"Maori didn't want to sell our land or treasures at all and that's why it was so important the treaty clauses remained in this deal to give that protection," he said.
"If it's taken out or reduced then it weakens the power and the tie of the treaty clause and not give us the protections that we want."
Sharples said Maori are upset about the possibility of the clause being changed and spoke to one leader who was prepared to stage a hikoi over the issue.
Jessica Mutch has been following this story and reports on ONE News at 6pm.
Turia said the issue could flare up at Waitangi Day celebrations over the weekend.
"It's very interesting that all this is happening around the time of Waitangi, one would think a Government wouldn't like to be provocative at this time but here they are consulting on clause nine," she said.
Turia said she was concerned the important issue had not been discussed with her before being brought into the public arena.
"If they (the Government) remove section nine there would be no reason for them to consult with maori on these issues so they would be actually denying the treaty exists and we're not prepared to accept that," she said.
"If it comes down to the wire the Maori Party will have to consider its position with the Government."
National's confidence and supply agreement with the Maori Party, signed in December, does not require it to carry out National's policies such as asset sales.
National, with the support of Act and United Future, has 61 of the 121 votes in Parliament without the Maori Party but John Key was keen to have a larger coalition.
Government's stability questioned
Labour leader David Shearer said the row has highlighted cracks in the coalition Government.
"It certainly raises questions about the stability of the Government," he said.
"The Prime Minister electioneered on the basis that this would be a stable government, and within one month of it coming into operation it's seen as being unstable."
He said the Government may want to change the legislation to make the SOEs more appealing to overseas buyers.
"The Government's motivations are simply to sell these assets more easily, it's clear they are putting profits before people and enabling overseas buyers more access to our assets.
"I think foreign owners are always wary of clauses like this but I would also argue the social responsibility clause that may come out of this legislation is very important."
Mana Leader Hone Harawira called for Maori to go along to the series of hui which have been organised to discuss the Government's proposals.
He told TV ONE's Breakfast that without opposition the
Government will "throw the Treaty out".