The powerful Waikato-Tainui iwi may press for smaller tribes affected by the Mighty River sale to receive shares on credit until their Treaty claims are settled when the Government consults them on the partial sale of the company.
Prime Minister John Key said yesterday that the Government was postponing the sale plan until between March and June next year.
The Maori Council, which was threatening a court challenge to the sale plan, hailed the decision as a vindication of its claim to the Waitangi Tribunal.
But last night, it warned that the Government's planned consultation with iwi affected by the Mighty River sale would not necessarily prevent a court challenge.
Yesterday, Mr Key said the consultation would focus on the "shares plus" concept raised by the Waitangi Tribunal in its interim report on the council's claim that the sale should be delayed until Maori rights over water were clarified.
The tribunal found that allocation of special power company shares with additional financial and governance rights attached was potentially a critical means of addressing Maori claims over water which would be lost following a partial sale.
Mr Key said his Government opposed such a mechanism as not being in the national interest, unworkable, and likely to reduce the amount raised in a partial sale. Nevertheless it had decided that talking about it with relevant iwi was the "the prudent thing to do".
The Herald understands legal advice to ministers was that the Government odds of winning a court challenge by the Maori Council were about even. However, David Goddard, QC, also advised them that further consultation with affected iwi would demonstrate good faith that would be regarded favourably by the courts and significantly increase its chances of winning any subsequent litigation.
The Government has not finalised which iwi it will consult but the list includes Waikato-Tainui.
Its chairman, Tom Roa, said his iwi welcomed the Government's indication of "a more considered approach".
Mr Roa said that working together, iwi along the Waikato River - where Mighty River has a series of dams - were in a strong negotiating position.
Those tribes and also the Iwi Leaders Freshwater Group were particularly concerned about iwi who had not settled outstanding Treaty claims.
Those iwi would be disadvantaged in terms of securing an economic interest in Mighty River or other power companies if that was something they wanted.
"We need to talk about possibly those iwi having the opportunity of buying shares on account," Mr Roa said. Iwi receiving shares on credit would pay for them when they settled their claims with the Crown, he said.
The Maori Council said the Maori Party was "to be commended for its constructive role" in influencing the Government to postpone the Mighty River part-sale.
But council lawyer Felix Geiringer said he was concerned by Mr Key's refusal to consider the issue of Maori rights over water on a national basis, as the council was seeking.
"They're talking about how they come to an agreement with one or two specific groups of Maori to free them up to go ahead with the first share sale ... obviously if it turns out the Government isn't genuinely engaging with the issue then they may end up forcing the council back to litigation."
Labour Party leader David Shearer said the Government had no choice but to delay the sale. "There is now so much risk and uncertainty around it that no investor is going to want to touch it - selling our best-performing assets at rock-bottom prices is economic lunacy."
Mana Party leader Hone Harawira said the delay was a "back-down of massive proportions" and "a victory for all New Zealanders, many of whom have been working furiously to get together the numbers needed to force a referendum to stop asset sales".