Ngati Kahungunu Iwi chairman Ngahiwi Tomoana says Ngai Tahu failed to tell him they had already invested in the proposed Ruataniwha water storage scheme.

Ngai Tahu Holdings has signed a memorandum of understanding with Hawke's Bay Regional Investment that the South Island iwi will invest in the scheme once consents had been granted and financial viability confirmed.

The scheme will generate electricity, protect minimum flow levels on the Tukituki River and irrigate up to 30,000ha but opponents say it will pollute the river by intensifying farming.

Mr Tomoana said Ngati Kahungunu would never invest in something that would destroy its taonga and Ngai Tahu had offered to be a mitigating force for any negative effects of the scheme and would withdraw from the investment if asked.

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But Mr Tomoana said he did not find out Ngai Tahu had already put money into the scheme until he read a report in Hawke's Bay Today. He said Maori should not have to pay for their rightful share in natural resource development.

Mr Tomoana said the model of sharing fisheries with Maori applied to other natural resource developments and flew to Wellington yesterday to give that message to Minister for the Environment Amy Adams.

"Until you do that you are not going to get any development of natural resources - you are just going to get handbrake, handbrake, handbrake," he said.

Ikaroa-Rawhiti MP Meka Whaitiri has said she wants Conservation Minister Nick Smith, who is under fire for allegedly intervening in a report on the scheme, to "come clean".

Ms Whaitiri, Labour's spokeswoman on water and associate spokeswoman for regional development, said the leaked DoC submission revealed the department believed the environmental impacts were "significantly more detrimental" to the waterways than Mr Smith wanted to show.

"Nick Smith needs to come clean about the concerns his own department has on the Ruataniwha Water Storage proposal and the impacts of Plan Change 6 to the water quality, and aqua life in the Hawke's Bay region," Ms Whaitiri said. "He then misled the public last week about his actions, and this week he is attempting to justify his position on the grounds that it would be too expensive to investigate whether the science of Niwa stands up to the scientific views of his own department."

Dr Smith was not available to respond but a spokesperson said the minister stood by statements last week that he had not seen the DoC draft submission on the Tukituki proposal until September 17.

Dr Smith said he was briefed on the 34-page draft in early July and it raised questions about the nutrient levels.

He was told there were differences of opinion with the department over the submission and in a later briefing was informed DoC had made a decision to focus on conservation issues rather than water quality.