He said he could not see New Zealanders supporting that.
"I cant see how it would help what is a vibrant growing multi-cultural New Zealand to succeed."
Mr Key said statutory co-governance arrangements between the Crown and iwi - such as for the Waikato River and Te Urewera National Party - were quite different from what Mr Little was suggesting "which is the independent state of Northland or something else."
Mr Key is set to deliver his Prime Minister's statement tomorrow to mark the start of the parliamentary year but he confirmed that he would not be reading it out in the House, simply literally delivering it and giving a different speech.
He said there would be no surprises in the statement but he would probably address Mr Little's comments on Maori sovereignty in his speech.
Mr Key said the Government was not in Parliament to just sit in the green chairs [in the debating chamber].
"It's here to carry out agenda which we have had a very strong mandate to complete and that is around economic development of New Zealand, around welfare reform, attacking some of those critical issues like housing."