Ngapuhi are divided over the Government recognising the Te Ropu o Tuhoronuku mandate to represent the tribe in Treaty settlement negotiations, with one side contemplating legal action.
Tuhoronuku, a sub-committee of Te Runanga a Iwi o Ngapuhi, has praised the Government decision.
But Te Kotahitanga nga Hapu o Ngapuhi - which wants the Waitangi Tribunal to complete its current hearing of about 360 Ngapuhi Treaty claims before negotiating settlement - is considering a possible legal challenge.
Treaty Negotiations Minister Chris Finlayson and Maori Affairs Minister Pita Sharples said in a statement on Friday that Tuhoronuku would separate from the runanga and become an independent mandated authority.
All Ngapuhi would vote to elect the 22 members of the authority, consisting of one runanga representative, two kaumatua/kuia representatives, four urban representatives (two from Auckland and one each from Wellington and the South Island) and 15 representatives from Te Whare Tapu o Ngapuhi (three each from Hokianga, Kaikohe-Waimate Taiamai, Whangaroa, Te Pewhairangi and Whangarei ki Mangakahia).
The authority would elect between three and six people to negotiate a settlement, the ministers said. Ngapuhi would later need to determine who would represent the tribe on a post-settlement governance entity, they said.
A statement from the runanga's Tuhoronuku sub-committee hailed the Government decision, which it said launched a new era of economic prosperity for Ngapuhi and Northland.
Settlement negotiations were expected to begin within the next four months, with the Government wanting the process completed by the end of the year.
Runanga chairman and sub-committee interim chair Raniera (Sonny) Tau said that, with Prime Minister John Key saying in June last year he had seen "poverty beyond belief" in parts of Northland it was incumbent on every Ngapuhi leader to advance settlement without delay.
Ngapuhi would be looking for a bigger settlement than the $170 million which Waikato-Tainui and Ngai Tahu had each received, Mr Tau said.
Last week he said Ngapuhi wanted between $500 million and $600 million in settlement.
Te Kotahitanga co-chairman Pita Tipene said of the more than 3500 submissions the Crown had received on the Tuhoronuku mandate in August last year, 2221, or 63 per cent, had opposed it.
"This is a clear indication Tuhoronuku do not have the majority support of Ngapuhi.
"The Crown is pushing ahead with Tuhoronuku against the will of our people because it will make them look good as they approach the elections at the end of the year."
The ministers had outlined a process for hapu or groupings to withdraw from Tuhoronuku and many had already decided to invoke that option instead of being sucked into the Tuhoronuku regime, Mr Tipene said.
Also, as with all Treaty settlements, any Crown-Tuhoronuku package would need to be ratified by Ngapuhi members before the deed of settlement of signed.
This "final chance to vote down the mandate at the end of the process" was very achievable, Mr Tipene said.
The Government decision was being analysed and the next steps included a possible legal challenge, he said.