The Prime Minister has told two groups at the centre of Ngapuhi's Treaty claims the Crown will step away from the process, leaving one leader happy and another disappointed at what he calls "another setback".

Tuhoronuku, the group which holds the Crown-recognised mandate to negotiate Ngapuhi's Treaty claims, and Te Kotahitanga, the group which opposed the recognition of that mandate, met Bill English in Auckland recently.

The meeting resulted in Mr English telling the two parties he would withdraw Treaty Negotiations Minister Chris Finlayson and the Office of Treaty Settlements from the process while Ngapuhi worked something out. They could go back to the Crown in October, he said.

Hone Sadler, chairman of Tuhoronuku, said it was a "good indication" the Crown was "finally recognising that we need to be in control of our own destiny rather than the Crown dictating".

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"They've been intervening and that's what the problem is, there's been too much intervention on their part.

"It's like this, we do it or we miss out.

"So how we do it? It is our business how we do it. So long as we come up with the process at the end of the day."

Mr English said the Government confirmed its view that Ngapuhi alone must decide how it should be represented in Treaty negotiations.

"The Crown remains committed to a settlement and confident one can be reached. Once Ngapuhi has agreed on a way forward and on who will carry out negotiations on its behalf, those negotiations can progress."

He said the Government also offered to fund a mediator if Ngapuhi could decide on who that should be and the process to be followed.

But Te Kotahitanga co-chair Pita Tipene said Maranga Mai, a document established by the Crown, Te Kotahitanga and Tuhoronuku following a Waitangi Tribunal report which found the structures of the mandated-body undermined hapu sovereignty, already recommended a way forward.

"It's there, it's ready to go, the Government has endorsed it and Minister Finlayson has written letters saying so. It's all ready to go - the structure, the timeframe of how to move forward are very clear."

Mr Tipene said he made it clear to the Prime Minister that he did not support what he had outlined at the meeting which was also attended by Tuhoronuku's Sonny Tau and Te Kotahitanga co-chair Rudy Taylor.

He said Te Kotahitanga told Mr English the last option would be legal action if he deviated from the Maranga Mai pathway.

"The Government is setting us back further. While everyone think it's the leadership causing the problems it's the Government. It's just another setback in a long line of setbacks by the Crown."

Chris Finlayson, Minister of Treaty Negotiations, said the Government has not withdrawn from the Ngapuhi settlement process and was committed to a settlement.