Maori chiefs never agreed to give up their sovereignty when they signed Te Tiriti in 1840.

That was the key finding of the Waitangi Tribunal's long-awaited stage 1 report of Te Paparahi o Te Raki (Great Land of the North) Inquiry, which was released at Waitangi's Te Tii Marae on Friday.

The 600-page report, which took hundreds of hours of testimony and four years to write, aimed to establish what Ngapuhi rangatira agreed to when they signed He Whakaputanga (the Declaration of Independence) in 1835 and Te Tiriti (the Treaty of Waitangi) five years later.

Ngapuhi have long maintained their ancestors did not sign away their sovereignty or the right to make their own laws, and on Friday the Tribunal agreed.

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Following a powhiri for the judges, a crowd of several hundred people crowded into a marquee and spilled outside onto the lawn to hear the Tribunal deliver its findings.

There were loud cheers and applause when Tribunal manager Julie Tangaere reached her conclusion: "Your tupuna did not give away their mana at Waitangi, at Waimate, at Mangungu. They did not cede their sovereignty. This is the truth you have been waiting a long time to hear."

In short, the Tribunal found that Britain wanted sovereignty and the right to make laws over both Maori and Pakeha when it invited Ngapuhi chiefs to sign the Treaty.

The chiefs, however, believed - based on the Maori wording of Te Tiriti and explanations by Governor Hobson and others - they were only giving Britain the right to govern its own settlers and keep the peace. Britain would protect Maori from foreign powers, but Maori would continue to rule themselves.

What the report does not examine, however, is what its findings will mean in practice. Some leaders at Waitangi yesterday said the Tribunal's finding would strengthen their claims to natural resources, because their ancestors never consented to giving up sovereignty; others that it could open up avenues for Maori via international law.

Treaty Settlements Minister Chris Finlayson said in a statement there was no question the Crown had sovereignty in New Zealand, and the report did not change that.

"The Tribunal doesn't reach any conclusion regarding the sovereignty the Crown exercises in New Zealand. Nor does it address the other events considered part of the Crown's acquisition of sovereignty or how the Treaty relationship should operate today," he said.

But Ngati Hine leader Pita Tipene, who co-chairs the Te Kotahitanga o nga Hapu Ngapuhi group that instigated the inquiry, said the ruling meant that the way the country was governed may need to be changed to give more autonomy to hapu.

Te Rarawa leader Haami Piripi said the report showed everything Maori had been saying for 170 years was correct.

"We've always maintained we never ceded our sovereignty in its entirety, it was always about two peoples in one land. What Maori were trying to do was retain the ability to manage and govern themselves. In 1840 Europeans had 5 per cent of New Zealand's land mass. What logic would lead you to believe Maori would cede the other 95 per cent?"

Mr Piripi said the report would give Maori new avenues of negotiation over the ownership of natural resources such as water.

Ngati Hine academic Erima Henare said the report's implications were "tremendously huge". In the worst-case scenario the Crown would choose to do nothing, in which case the sovereignty issue would probably end up in court.

"In the best case, the Crown will sit down to discuss the ramifications in a way that allows the country to prosper and thrive, and not get bogged down in Tribunal hearings and courts."

Hokianga scholar Patu Hohepa said the report confirmed the English version of the Treaty was "fraudulent and absolutely not a translation" of Te Tiriti, which gave hapu the right to make their own laws.

After the conclusions had been read the claimant groups were called forward area by area, some tearful, others joyous, to accept copies of the report.

Stage 2 of Te Paparahi o Te Raki, which is currently under way, is examining breaches of the Treaty in Ngapuhi lands. The Government does not have to act on Tribunal findings.

TRIBUNAL SUMMARY

The following is the Waitangi Tribunal's summary, word for word, of its conclusions in stage 1 of the Northland Inquiry:

- The rangatira who signed te Tiriti o Waitangi in February 1840 did not cede their sovereignty to Britain. That is, they did not cede authority to make and enforce law over their people or their territories.

- The rangatira agreed to share power and authority with Britain. They agreed to the Governor having authority to control British subjects in New Zealand, and thereby keep the peace and protect Maori interests.

- The rangatira consented to the treaty on the basis that they and the Governor were to be equals, though they were to have different roles and different spheres of influence. The detail of how this relationship would work in practice, especially where the Maori and European populations intermingled, remained to be negotiated over time on a case-by-case basis.

- The rangatira agreed to enter land transactions with the Crown, and the Crown promised to investigate pre-treaty land transactions and to return any land that had not been properly acquired from Maori.

- The rangatira appear to have agreed that the Crown would protect them from foreign threats and represent them in international affairs, where that was necessary.

Though Britain went into the treaty negotiation intending to acquire sovereignty, and therefore the power to make and enforce law over both Maori and Pakeha, it did not explain this to the rangatira. Rather, in the explanations of the texts and in the verbal assurances given by Hobson and his agents, it sought the power to control British subjects and thereby to protect Maori. That is the essence of what the rangatira agreed to.