The Maori Council has claimed a limited victory over a Waitangi Tribunal request for the Government not to proceed with asset sales until at least September - but the council's lawyer says the real test for the Crown will be after the tribunal's final findings are released.

Yesterday, the tribunal issued an interim recommendation that state asset share sales be held off until September, when it will produce its findings from an urgent hearing into water rights and the impact of the asset sales.

The recommendation follows an urgent tribunal hearing last month into a claim brought by the Maori Council and some hapu seeking a halt to the sales.

The Government is yet to confirm it will abide by the tribunal's request. Prime Minister John Key said yesterday that it would seek advice on it before responding.


Maori Council lawyer Felix Geiringer said the tribunal's determination was very limited. The tribunal had said it was unlikely to prejudice the Crown's plans significantly, if at all, because the Government had until December to go ahead with the partial float of Mighty River Power.

However, in September the tribunal will deliver its full recommendations - including on the Maori Council's request for a longer delay while all water-rights issues were resolved.

"Obviously there is going to have to be a decision in September about whether there should be further delay and then the question of prejudice to the Government will of course change," Mr Geiringer said.

He said the Waitangi Tribunal had made some "useful remarks" in its determination, including that the Maori Council's claim was an issue that needed consideration.

Its memorandum said it was clear Maori had proprietary rights over fresh water although the extent of those rights was uncertain. The tribunal also questioned the Crown's argument that the share sales would not affect its ability to recognise and remedy those rights.

"Where the Crown alters the nature of the shareholding of a Crown-owned body utilising freshwater resources, it is, in our view, arguable that this may alter its ability, either in a legal or practical sense, to recognise any proven Treaty rights in such resources or to remedy their breach."

Maori Council co-chairman Maanu Paul said he was delighted by the development yesterday but if the Government ignored it, the council would go to the High Court.

He said many hapu had asked to come in under its umbrella on the issue.

The Prime Minister has previously downplayed the possibility that the water-rights issue could derail the asset sales, saying that the Government could ignore Waitangi Tribunal rulings because they were not binding.

Yesterday, he said he did not back away from those comments, but said he now wanted to consider the determination from the tribunal rather than relitigate that point.

He has previously said that legal action was almost inevitable.

The tribunal's fuller findings in September will address what rights and interests in water and geothermal resources are protected by the Treaty of Waitangi, and whether the sale of minority stakes in state-owned enterprises affects the Crown's ability to recognise those rights and remedy them.