The proposed sale of a $10 million block of prime Coromandel land is on shaky ground amid claims that state agencies have mishandled the deal.
Hauraki Maori have occupied the 1100ha block to stop the Landcorp sale, wanting the land to settle outstanding Treaty claims.
Landcorp chairman Jim Sutton said the Crown entity was the "meat in the sandwich" and he did not rule out cancelling the proposed sale.
"Let's wait and see. There is obviously a claim on this land that we were not aware of. Had we been aware of it, of course we would have been trying to persuade the Office of Treaty Settlements to purchase it."
The former Cabinet minister criticised the office's handling of the issue and urged the Government to reconsider its refusal to purchase the property for a pending Treaty settlement.
Landcorp chief executive Chris Kelly earlier told the Herald the state-owned enterprise had followed the correct process and was within its rights to sell the block.
Prime Minister Helen Clark said yesterday she was unaware of the dispute. "I don't have any brief on that one at all and that's been news when I looked at the Herald this morning," she said on Newstalk ZB.
"There is a procedure where the Office of Treaty Settlements must be offered back land by Landcorp.
I don't know if that has been the case with that or not, I assume it has been because that is the procedure they are required to follow."
Treaty Negotiations Minister Mark Burton said last week that land held by SOEs and the Department of Conservation was not available for settlement if other land was available.
Yesterday, he said the land, if sold, could be bought back from the new buyer for a land settlement.
The block was subject to a memorial registered on the title under Section 27B of the State Owned Enterprises Act.
The memorial allows the Government to buy back the land if it is needed to settle a claim.
Hauraki spokesman John McEnteer questioned the enthusiasm of any Government to buy back land as "no government will want to tell those new property owners that they must sell their homes".
He said the occupation would continue. Leaders and tribal members from Hauraki's 12 iwi were expected to meet on the site last night. The heads of the Tainui confederation were expected to join protesters this morning.