Prime Minister John Key has now effectively confirmed the Kermadec Marine Sanctuary will be put on ice indefinitely if an agreement with the Maori Party over fishing rights cannot be reached.
Speaking from New York yesterday, Key said there was strong support for the marine sanctuary among Pakeha and many Maori but he was not willing to risk instability for his government over it.
"We are not about to go and do something that is going to cause the Maori Party to walk away. If we have to wait a while, we have to wait a while.
"There is zero chance of this causing instability issues with the Government so if we have to wait we have to wait."
It is the clearest statement so far from the Government that it will put the sanctuary on ice at least until after the election over the fraught issue of Maori fishing rights.
Key made the comments fron New York, where he first announced the marine sanctuary this time last year.
That could leave the problem in the Labour Party's hands, depending on the outcome of next year's election.
Labour leader Andrew Little said Labour will not guarantee continued support for the Kermadec Marine Sanctuary unless an agreement can be reached with Maori.
Labour had initially supported the legislation, but with serious reservations after the Maori fisheries issue came to light. It has put forward amendments to preserve Te Ohu Kaimoana's (TOKM) ability to test its rights in court.
"That has got to be a bottom line. The Government has got to sort this out or Te Ohu Kaimoana have got to have the right to test that right in court. Labour learned this from the Seabed and Foreshore [Act]," Little told Radio New Zealand.
"I can't guarantee we would continue to support it. The Government has got to know that when a settlement is reached that those settlements have to have integrity."
He said the Government had "completely mishandled" the sanctuary and Labour's assumption it had done its homework before the plans were revealed was wrong.
Deputy Prime Minister Bill English yesterday conceded the Government could have handled the process better, and Key also said in hindsight the Government should have consulted.
However, he did not believe consultation with Te Ohu Kaimoana before announcing the sanctuary would have made much difference.
"I don't think any level of consultation would have changed the fundamental disagreement. In the end I think if we'd gone and spoken to them, yep, in hindsight we should have done that, but if we had done that it wouldn't have changed anything."
He said Te Ohu Kaimoana fundamentally disagreed with ocean sanctuaries and believed the quota management system was the better way to manage fisheries, whereas the Government believed a mix of both was appropriate.
Talks between TOKM and the Government collapsed last week and TOKM is now considering High Court action.
Talks are likely to be led by Key and English rather than Environment Minister Nick Smith.
Little said that in Chris Finlayson the Government had "probably one of the most outstanding Treaty negotiation ministers that we have ever had" and he needed to be involved in finding a solution, with the full backing of Prime Minister John Key and the Cabinet.