ACT leader Rodney Hide has set himself firmly against having any Maori seats on the new Auckland 'super city' council but denies he is holding the Government to ransom over the controversial issue.

A spokesman for Prime Minister John Key said the new council arrangements were being worked through and the relationship with ACT remained strong.

The Royal Commission which reported on Auckland's local government structure recommended reserved Maori seats but the Government scrapped that when it set out its plans for the city.

The Maori Party has been lobbying to overturn the Government's decision and both sides have been looking for a compromise.

But a National MP has sent an email to his caucus colleagues saying Mr Hide, who is Minister of Local Government, has threatened to end ACT's relationship with National if it agrees to having reserved Maori seats on the new council.

ACT signed a support agreement with National after the election which ensures the Government's majority in Parliament. The Maori Party has a similar agreement.

TV3 News said tonight it had a copy of the email, sent by an unidentified senior caucus member to all his colleagues.

"The Act Party has threatened to end its relationship with National if we allow Maori seats on the super city (council)," the email said.

"Despite multiple arguments in support, its mind cannot be changed."

Mr Hide said the email was wrong.

"We've certainly never threatened to end the relationship," he said.

"What we have done is state our position very clearly and we are opposed to any reservation of seats for a particular group."

The TV3 News report said it understood Mr Hide had threatened to resign as a minister if the Government "gave in" to Maori.

Mr Hide said it would be hard for him, as a minister, to introduce Maori seats.

"But that's part of the discussion we're having," he said.

Mr Key's spokesman said ACT's strong views on the Maori seats were well known.

"Our relationship with ACT remains strong," the spokesman told NZPA.

"We are working through arrangements for the super city. We have all sorts of discussions with support parties, we're not about to start conducting those in the media."

A special select committee which has been holding hearings in Auckland is due to report to the Government in about two weeks.

It has dealt with the issue of Maori seats and is expected to make a recommendation one way or the other.

- NZPA