A controversial land swap which has delayed the Ruataniwha Dam may not go ahead.
In March Forest & Bird appealed a High Court decision which allowed for a land swap so the Ruataniwha dam could proceed.
It is understood a Forest & Bird appeal has been successful.
"This decision is a major victory for New Zealand's specially protected lands. This land swap would have set a precedent for up to 1 million hectares of specially protected conservation land, which includes forest parks, conservation parks, and ecological and wilderness areas," says Forest & Bird lawyer Sally Gepp.
"This case goes to the heart of the purpose of the Conservation Act 1987, and upholds Forest & Bird's position that specially protected conservation land should not be subject to commercial or political whim."
The Department of Conservation had proposed swapping 22ha of the Ruahine Forest Park for 170ha of land the Hawke's Bay Regional Investment Company ltd (HBRIC) would potentially buy from Smedley Station.
This would downgrade the protected conservation status of the land to allow it to be flooded as part of the Ruataniwha Water storage scheme.
Last year the environment group also sought a judicial review on this decision.
In May the regional councils investment arm, HBRIC, cross-appealed the high court decision.