The Waitangi Tribunal has found the Crown made a series of Treaty breaches at the expense of local iwi during the construction and operation of the Genesis Energy-owned Tongariro hydro-electric power scheme.
But Finance Minister Bill English this morning said he did not expect claims for compensation or other redress would derail his Government's planned partial privatisation Genesis slated for early next year.
The Tribunal this morning released its final report on Tongariro National Park Claims which contained sections on issues around the hydro scheme and geothermal resources.
Those issues were not covered in a previously released draft because they were the subject of an ongoing separate claim which went to the Supreme Court earlier this year.
The court ruled the partial sale of power companies did not affect the Crown's ability to make redress for any water or geothermal related treaty breaches but set out how it believed the Crown should engage with iwi over any rights and interests in water.
In this morning's report the Tribunal found that local iwi had never relinquished ownership and control of their waterways.
"They retain residual proprietary rights in the waterways of the inquiry district, and the right to develop them."
It said that when the Crown set up the scheme, it met Ngati Tuwharetoa, but did not consult the trustees of Lake Rotoaira or Whanganui iwi.
A 1972 agreement with the trustees of the lake which is used for water storage in the scheme denied the lake's owners any commercial benefit and was itself a significant Treaty breach.
"In operation, the scheme's impact on lakes and rivers has resulted in a loss of water quality, habitat, and food and fish resources, particularly at Lake Rotoaira."
The Tribunal said the Crown did not compensate the owners for the detrimental impacts of the scheme or for the use of Lake Rotoaira for hydropower storage.
It recommended "significant compensation" to remedy the breaches and that local iwi's residual property rights be given due recognition.
Mr English said today the issues dealt with by the Tribunal were not new.
"We started last week on the process of consultation to meet the formal requirements of the Supreme Court regarding the sale. We've had discussions with people with a direct interest in the claim. It's wrapped up in the Tuwharetoa treaty claim which is under negotiation so there's no new issues been raised and we'll be following the guidance of the Supreme Court through this process."
The Maori interests concerned had been discussing the issues in detail with Genesis for some time he said.
Mr English said the claimants had the choice of resolving the long standing issues through negotiation or via the courts.
"We've all got an interest in finding a way to resolve it but it doesn't bear directly on the sale. The Supreme Court's made it pretty clear that the sale of shares in these companies doesn't compromise the Crown's ability to deal with the claims."
Labour Leader David Cunliffe said he agreed with the Tribunal's findings "and it's yet another reason why this crazy asset sales programme should stop now".
"This was not a problem when all New Zealanders owned these assets through the Crown. As soon as you try and clip the ticket and sell them off to a small percentage, these problems occur. There will be more court cases."
Mr Cunliffe said Government's negotiations with Tuwharetoa and other affected iwi meant Mr English was "going to write them a cheque".
"He's already burned a billion dollars by rushing this fire sale, he's rapidly revising downwards what he thinks he's going to get from it. This asset sales programme is a shambles it should stop now and in the citizens initiated referendum we'll see what New Zealanders think of it."
In a statement, Genesis said it had been "engaging constructively for some time with iwi that have an interest in the Tongariro Power Scheme''.
"Matters of compensation and ownership are between iwi and the Crown.''