One of the surplus land holdings in Auckland shown off to journalists in May as available for the Government's affordable housing partnership with private developers had already been offered to iwi under right of first refusal, the Herald has learned.

The limited partnership to which it had been offered comprises, in part, Ngati Whatua, which Prime Minister John Key claims has no right of offer of first refusal.

Ngati Whatua and Waikato-Tainui confirmed last night that they would ask the High Court to clarify the Crown's interpretation of right of first refusal.

Mr Key said at his post cabinet press conference yesterday that there was no existing case on which Ngati Whatua could go to court to test the principle of right of first refusal.

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But surplus land in Moire Rd, East Massey, which was in the process of being disposed of may provide a case.

Housing Minister Nick Smith took reporters on a tour of several sites in Auckland to show where new houses could be built on Government land by private developers.

The plan was a late addition to the May Budget - a bid to boost the supply of new housing and address rising house prices.

One site was Ministry of Education land at 81 Moire Rd.

On December 18 last year, property managers Darroch gave notice to the limited partnership established under the Tamaki collective settlement - under the right of first refusal - that it would be offering the land to the partnership.

Darroch said it still had to offer the land to the original owner but that if it cleared that process, it would be offered to the Tamaki Makaurau collective in 40 working days.

The partnership, known as Whenua Haumi Roroa o Tamaki Makaurau, comprises three groups including Ngati Whatua.

The surplus land is not offered to the Tamaki collective as such but to the limited partnership - although the partnership heard nothing from Darroch after the December letter.

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It is thought it was then added to the list of potential Government land that could be built on and sold over the next few years.

The Government takes the view that it may deem Government land suitable for any other Government purpose and there is a specific clause in the Tamaki collective settlement allowing the Government to dispose of housing land if it assists in achieving the Crown's social objectives in relation to housing. But any court challenge to the Crown is likely to argue that privatising land falls outside that provision.

Waikato-Tainui's Tukoroirangi Morgan and Ngati Whatua's Ngarimu Blair said that position was "disappointing".

They had wanted the Government to make a joint approach with iwi to settle the issue for the good of both parties. In a statement, they said: "A joint approach ... could have led to our difference of opinion being settled collaboratively in a matter of weeks and allowed us to be a greater part of the solution to Auckland's housing issue."

Instead, they would "have to go down the old-fashioned path" and take legal action. Iwi planned to file papers with the court this week and hoped it would be given priority.

Mr Key said:
"The Government is very sure of its legal position, and that is it's quite entitled to use existing government land for a stated government purpose, which in this case is the provision of housing."