No breakdown in Maori Party relationship - Key

Prime Minister John Key has failed to dampen the anger of the Maori Party. Photo / Mark Mitchell

Prime Minister John Key disagrees that the Maori Party's threat to walk out on National indicates a breakdown in the parties' relationship.

Maori Party co-leaders Tariana Turia and Pita Sharples yesterday said they would consider pulling out of the support arrangement with National if a Treaty of Waitangi clause was not extended to new legislation that will cover partial state asset sales.

The clause is section nine of the State Owned Enterprises Act which requires the Crown not to act in a manner inconsistent with the principles of the treaty.

A consultation document for iwi on the legislation for the partial sales programme is to be released today, and will be followed by a series of hui next week on the plans to sell minority stakes in four energy companies.

The Government appears to have taken steps to soothe the Maori Party, with Finance Minister Bill English meeting Dr Sharples yesterday, and speaking to Mrs Turia on the phone this morning.

"We've just taken them through the consultation process, outlined what we're going to do and what we think the issues are likely to be," Mr English told media.

"They're in an interesting situation, because they made it clear after the election they were opposed to the mixed-ownership model, so in that sense they're part of the Opposition. At the same time we work with them on a whole range of issues, and we want to take into account their views."

Mr Key said he remained confident the parties would find a way through the situation and disagreed it showed the relationship between National and the Maori Party was breaking down.

Asked whether he thought the Maori Party's threat was just a negotiating tactic, he said: "I think they genuinely care about the issue, I'm simply saying we need to work our way through it.

"This is a consultation process, it starts today. Like all negotiations and discussions there'll be an end point to it but I'd be surprised if that end point was one that ends in tears."

He had no specific plans to meet the Maori Party co-leaders to discuss the issue, but said there would be face-to-face talks at some point.

Mr Key maintained that he did not think section nine could be carried over to mixed-ownership companies, and said it was possible a more specific clause would be used instead that made it clear private shareholders were not bound.

Dr Sharples said yesterday it was important to retain the wording of section nine because it was all-encompassing, and covered water and other natural resources which Maori were negotiating over with the Government.

"Unless the treaty clause is kept in there to protect and keep that interest there, then we are going to be up the lake without a paddle.

"If it is taken out or reduced to a more particular clause and not left to apply generally, then it weakens the power of that treaty clause and it will not give us the protection required."

Mrs Turia said the Maori Party believed there was value in being in Government, but it would not remain there "at all costs".

"If they remove section nine there will be no reason for them to consult with Maori over these issues so they will actually be denying that the treaty exists and we are not prepared to accept that. We have to be vigilant and if it comes down to the wire, the Maori Party will have to consider its position with the Government."

The problems have arisen just days before the annual celebrations at Waitangi, and the Prime Minister said he intended to speak about them on Te Tii Marae.

"There'll be lots of people that won't understand the position, they'll be terribly bamboozled and confused by it all," Mr Key said.

"The message they'll be hearing is something completely different from what's actually happening."

Mr Key said he would emphasise that the Government was not walking away from its treaty obligations.