The Far North District Council has been granted up to $2 million from the Government's Provincial Growth Fund to set up temporary water supplies in Kaikohe and Kaitaia.

Regional Economic Development Minister Shane Jones said the immediate solution was to pipe water from a bore on (Te Rarawa's) Sweetwater Farm to Kaitaia, and from Lake Ōmāpere to Kaikohe. And he made it clear that he did not expect iwi politics to get in the way of either project.

It concerned him greatly that there were "issues" regarding the council gaining access to both water sources, and he wished to deliver a "clear message" to Te Rarawa and Ngāpuhi.

"If you can't act in a neighbourly fashion to deliver services to your communities, then it is time for the leaders of these iwi to hang up their egotistical spurs and do something else," he said.

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"The communities will be repelled if mana-munching gets in the way of delivering water to Kaitaia and Kaikohe."

He was aware that some iwi, including te Rarawa and Ngāpuhi, wished to pursue the issue of water ownership in the Court of Appeal, but he assured them that it would be "a thousand years" before he or his party would transfer ownership to hapū.

"Iwi leadership is more worried about who owns the water than about their hospital, Juken's mill, Ngāwhā prison, the old folks' homes, the households in their communities," he said.

"The irony is that many of the most vulnerable people in these communities are members of these very iwi, whose leaders want to engage in some obscure debate about why hapū should own the water. This is the thinking of a tiny group of leaders who sit on windowless rooms and look at mirrors.

"As the scriptures say, rain falls on saints and sinners in equal proportion. I want to see more saints and not so many sinners."

He accepted that the operation of Sweetwater Farm would be disrupted by the project, and measures would be taken to minimise that. He was also aware that Lake Ōmāpere was susceptible to water quality issues, but it would be constantly monitored to ensure it remained healthy.

The projects would be led by former MPI director-general Martyn Dunne.

"These measures will ensure economic activity remains under way in Northland, one of the PGF's surge regions. It also ensures that residents in these communities can continue their lives without significant hardship and disruption," Mr Jones added.

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"Once the immediate water supply issues have been addressed, officials will work with the Northland councils to determine what is required to prevent a similar situation in future. A significant step is the commitment of the Far North District Council to contribute $1 million to the PGF water storage project at Ngāwhā. A similar commitment will be required to secure the water supply in Kaitaia."