Prime Minister John Key has told Ngapuhi's warring factions to sort out their differences over their Treaty settlement because he would like an agreement in principle by the end of the year.

At Waitangi yesterday Mr Key even offered an interim settlement payout to get the process moving more quickly. But he may find his timetable too optimistic, with one side of the divide saying it wouldn't be rushed for his "political expediency" and the other saying Ngapuhi wanted $500-$600 million - the largest of any Treaty payouts.

In his traditional Waitangi Day breakfast speech at the Copthorne Hotel, Mr Key said Northland needed economic stimulus and the Government was putting in a lot of effort by encouraging minerals exploration, investing in agribusiness and improving the highway north.

"However, the biggest injection will come when all iwi here wiling and able to settle [their Treaty of Waitangi claims] do so. "Several hundred million dollars would be injected into the local economy," Mr Key said. "So I'm very ambitious to see an agreement in principle with Ngapuhi signed this year.


"The Ministers of Maori Affairs and Treaty Negotiations will make a decision on mandate very soon. It's time for Ngapuhi to put aside their personal differences and unit to focus on the big prize. A settlement will provide Ngapuhi the opportunity to play a key role in developing Northland and its economy.

"If that can be done I am prepared to look at some form of (interim) payment on account to incentivise people to act in a positive and progressive manner."

He said the Government would deal with whoever Ngapuhi chose to represent it. The settlement is being held up by division on how the process should proceed.

Te Ropu o Tuhoronuku wants direct settlement negotiations with the Crown while Te Kotahitanga o nga Hapu Ngapuhi wants a negotiated settlement that will allow elders to tell their stories of the hurt and damage caused by the Crown's actions.

Te Kotahitanga spokesman Pita Tipene, who heard the PM's speech, said he felt encouraged and hopeful by Mr Key's words and offer, but said there was yet to be an agreed mandate.

"We won't be pushed just for some political expediency. If the Government keeps trying to force Ngapuhi into discussions it will keep creating protest," Mr Tipene said.

"The people of Ngapuhi aren't interested in the money, and the money is not going to drive the settlement. We want to improve the lot of our people, but we want a hapu-based Treaty settlement for Ngapuhi. There's still a lot of work to get that."

Tuhoronuku interim chairman and Te Runanga a Iwi o Ngapuhi chairman Sonny Tau said because Ngapuhi was four times larger than Tainui, Ngai Tahue or Tuhoe, which had settlements of about $170 million, it was looking for a settlement that much greater. "It's about $500 million or $600 million."

Responding to that, Mr Key said: "You've got to dream big but it doesn't mean we'll be writing a cheque for that amount."

Nevertheless, "it's going to be a big deal".

Treaty Negotiations Minister Chris Finlayson would not state how much the Government would give, saying he would not negotiate via the media.