Ngapuhi factions say Prime Minister John Key used his Waitangi Day speech as a platform to prematurely force a historic settlement with Ngapuhi in election year for political gain.
In his speech yesterday, Mr Key held out the prospect of an advance payment against the eventual settlement for New Zealand's largest iwi.
He challenged Ngapuhi to put aside its differences to enable that and said he was keen to see a deal struck this year.
He noted other iwi had previously received similar advance payments.
Chairman of Ngapuhi's runanga Sonny Tau welcomed the offer but said it would seek a final settlement of as much as $600 million - four times bigger than the landmark Tainui, Ngai Tahu or Tuhoe settlements.
Mr Key's response was: "You've got to dream big but it doesn't mean we'll be writing a cheque for that amount."
Pita Tiipene, spokesman for Kotahitanga, the hapu-based collective which opposes the runanga's dominance of talks with the Government, criticised the offer as a political ploy.
"Clearly the minister and the Government is trying to force Ngapuhi into a settlement and today was another step in that direction. There are political motivations, it's so the Government can say that they're well on track to settle Ngapuhi before the elections and really there's been no genuine and honest talks with the people of Ngapuhi."
Cash was a secondary issue to getting the settlement right.
"This will eventually end up in litigation if the Government continues to try and force a round peg into a square hole."
Labour leader David Cunliffe said the offer was a "slightly superficial way to solve this issue".
"Some more deep conversations with the Government helping to facilitate dialogue between the hapu and the iwi might be useful without wanting to intrude on what is actually an internal matter."