The Prime Minister has pulled out of attending Waitangi.
Mr Key has announced he will not attend after failing to get a response from Te Tii Marae to his concerns about an attempt to prevent him speaking about politics.
Mr Key said he made his decision after the marae retracted its original invite to speak on the same conditions as previous years and said he could not speak on the TPP.
He had tried to get the marae to clarify but did not receive a response by the 4pm deadline he wanted.
"On the back of that, we've made a decision we won't be going to Waitangi this year."
Mr Key denied he was "running scared" and had hoped to stick to his 2007 commitment to return every year.
"But I can't go and I won't go to Waitangi with a gagging order on me and I won't go when there is a position where senior elders of that marae are actively encouraging I think violence actually, and that is what Kingi is putting out there."
He said he had not yet decided where he would spend Waitangi Day.
The vice-chairwoman of the marae trustees, Merehora Taurua, said the Prime Minister had made his own decision not to travel to Waitangi.
"I don't think too many people will be upset about that."
Ms Taurua said the marae chairman had this morning received a letter from Mr Key "threatening" not to travel to Waitangi if he was not given speaking rights in the whare (meeting house).
She said that this year, because of the Trans-Pacific Partnership, Mr Key had been invited to address political issues in the marae's political forum tent following the powhiri rather than addressing them on the main marae as he had done in previous years.
The chairman was given until 4.15pm to send a formal response to the PM's letter.
"In the meanwhile, the Prime Minister was being told from one source that he was not welcome on the marae and from another source was being told that he was blackmailing Ngati Rahiri."
Ms Taurua said the chairman was about to send an email to confirm the invitation to the PM when Mr Key's office phoned to tell him the Prime Minister had pulled out of travelling to Waitangi.
"The email was sent anyway."
Ms Taurua said Mr Key was now no longer welcome on Ngati Rahiri land.
"Opua is where our land starts and south of Kerikeri is where it finishes. He is not welcome on our land."
Mr Key said comments about potential violence if he did speak about TPP had raised security issues.
Had he gone in such a situation it would have been "rather silly."
"You've already seen some rather contradictory statements made by Kingi [Taurua] and others and if I did go onto the marae and did speak about TPP that would incite protests and potential violence and he would encourage that."
He said that put his entourage and security in a dangerous position.
"The second thing is my relationship with Te Tii Marae is one of very much respect. I've respected their tikanga, their customs, I've respected that environment and I've always tried to go there as Prime Minister to ensure the engagement with that marae and the elders of that marae is intact as a relationship with the Treaty."
However, he said that respect went both ways.
"That's also the respect to allow me to actually speak."
Mr Key said many Maori had argued there was not enough consultation about the TPP, although he believed there had been years of consultation on it.
"By stopping me going on the marae and actually answering the protestors that would be outside ... they're doing the very thing they're criticising me for. They're not giving any opportunity to actually go and explain our position."
He said that would have answered all the questions.
Mr Key said he would not attend any functions at Waitangi because it was custom to go to Te Tii first.
"For me not to go there would sort of have me in this ridiculous position where I'd be the Prime Minister of New Zealand seen to be leaning over the fence at what was going on on the Lower Marae, looking in but not able to go in. I think that's completely disrespectful on both sides."
He said although former Prime Minister Helen Clark had gone without visiting Te Tii "that's the advice I've had and that's the call I've made."
Mr Key said it was possible some National MPs would go, and some ministers were already in Waitangi.
"We're not telling them not to go, we're simply not going ourselves."
He said there was frustration among New Zealanders about the scenes at Te Tii, given for many it was "a day of great celebration and great joy."
He said the protest at Te Tii did not overly concern him, although he was concerned about the image it portrayed of New Zealand. However, his reason for not attending was because he would be unable to answer the protestors' claims.
He did not believe it would impact negatively on National's relationship with Maori or with Ngapuhi and did not expect it to affect Ngapuhi settlement talks.
"We are simply at a point though where I can't go, as the Prime Minister, onto a marae with a gagging order."
He said it was impossible to meet in the middle. Usually it was a respectful process of to-and-fro. "I'm not the one stopping that. It is certain elders who are stopping that."
At the marae, members of the executive are understood to be meeting now to decide how to respond.
But before Mr Key's decision, Te Tii Marae trustee Emma Gibbs says the marae will not back down on preventing Prime Minister John Key from speaking about politics on the marae, but other marae elders disagree with the decision.
Mrs Gibbs also took offence at Mr Key's description of the marae organisation as "Mickey Mouse" saying last year he had personally thanked her for a well-run powhiri.
She believed Mr Key was trying to make the marae look bad.
"John Key is trying to play the victim here. He's trying to make out to the country that he's the victim of this marae."
She said the no-politics rule applied to other political leaders as well, although the marae had not written to them because they did not need it explained to them.
"They are not allowed to talk about the TPPA. Especially the TPPA.
They know the rules. If they bring it up, our taumata will just shut them down."
She said the main no-go area was the TPP and if Mr Key started to address it he toowould be stopped.
However, others disagreed it was tikanga not to raise politics. The letter to the Prime Minister also seems to say that the speakers from the marae will also not raise politics.
Elder Kingi Taurua, who had opposed Mr Key attending at all, said he had refused to sign the letter because he believed if Mr Key was invited he should be free to say what he wanted. Mr Taurua usually speaks in the powhiri.
Kaumatua Rihari Dargaville, whose name was on the letter, denied Mr Key was told not to raise politics.
"Nobody can say 'don't talk politics.' We are not here to gag anybody."
He said Mr Key could raise what he liked, but could not talk for hours on end. "The subject matter he wants to talk about? Fine."
However, he said Mr Key should also visit the political forum tent elsewhere on the marae grounds to give the public the right to respond to him - something that could not happen on the marae. He said other leaders, such as Jim Bolger and Jenny Shipley, had visited the tent.
"I took them there."
The marae paid to hire a marquee for a political forum out of its $2,500 Government grant and he should visit that - something Mr Key has refused to do because of other commitments.