Mr Peters focused on the reform of the RMA in his state of the nation speech last night, delivered at the Orewa Rotary Club -- the same venue where former National leader Don Brash gave his controversial 2004 speech.
The NZ First leader said that under the new RMA bill, councils would be required by law to invite local iwi to participate in the formulation of policy plans, including water management plans.
"This is just the starting point," Mr Peters told the audience. "Iwi really want much, much more."
That included effective ownership of a share of the country's freshwater, Mr Peters said. National had also backed away from reforming sections six and seven of the RMA, which set out environmental bottom lines.
"It is obvious that National have been brownmailed into making policy concessions to the Maori Party ... the proposed changes to the RMA are a signal flare to the entire country that the two parties are taking us down the track of separatism."
Mr Peters said NZ First would remove all reference to the principles of the Treaty of Waitangi from the RMA legislation, and rid it of terms relating to "spirituality".
It would introduce amendments to "bring common sense" to the RMA, but only if National dropped "provisions in the bill that provide separate rights based on race".
In November last year, advertisements backed by Dr Brash and claiming the Government was surrendering control of fresh water rights to iwi ran in Sunday newspapers.
The ads were taken by NZCPR, a group backed by Dr Brash, and featured a reprise of the "Iwi Kiwi" billboards used when Dr Brash was leader of National in 2005.
This time, the "Kiwi" was written on a glass from which water is pouring into a glass with "Iwi" written on it.
Prime Minister John Key dismissed the ads as "a stunt" and inaccurate, and repeated the Government's position that nobody owned the water.
Last night Environment Minister Nick Smith said the speech was "typical Winston Peters mischief making", and the planned changes made clear that decisions would be made by elected councils.
The changes relating to iwi participation were about streamlining the process in which iwi were engaged and consulted with, Dr Smith said.
The provisions were published in 2011, Dr Smith said, disproving Mr Peters' claim that they were included because of the agreement reached with the Maori Party before Christmas.
Maori Party co-leader Marama Fox said NZ First was "tapping into people's irrational fears" that honouring Treaty rights would remove the rights of non-Maori.
"We make no apologies for ensuring the Treaty rights of Maori are recognised by the proposed changes to the RMA. We want to live in a country where we recognise our duality of nationhood and honour Te Tiriti o Waitangi."