The Government is facing a fresh challenge to its asset sales programme in the form of a bid for national referendum on the controversial plan.

An alliance of community groups led by Grey Power and backed by Labour and the Greens will this week launch a petition calling for a Citizens' Initiated Referendum on the partial asset sales plan.

However, the referendum amounts to a desperate rearguard action against the plan, which the Government claimed a mandate for after the last election.

The petition will oppose the proposed sale of up to 49 per cent of Mighty River Power, Genesis and Meridian and needs to get 307,000 signatures to force the referendum.


However, even if it succeeds, the Government chooses when the referendum is held and is not bound by the result.

Greens co-leader Russel Norman accepted that the petition and referendum stood little chance of derailing the Government's plan.

"But we live in a democracy and so people in this country believe they've got a right to have their views heard. A Citizens' Initiated Referendum is far from a perfect tool - it would be better to have a binding referendum but we're using what we've got."

The Government's partial sale plan moved forward yesterday as it introduced legislation altering the structure of the companies, allowing them to be sold and listed on the sharemarket.

The legislation, which includes the same "Section 9" Treaty of Waitangi provisions protecting Maori interests as apply to state-owned enterprises, is a partial victory for the Maori Party, which threatened to leave the coalition over the issue. "During consultation hui last month, Maori conveyed a clear view that Section 9 should be retained in the new legislation," SOE Minister Tony Ryall said.

Maori Party co-leader Pita Sharples said his party welcomed the inclusion of Section 9 in the new legislation.

"After a while of negotiations and iwi consultations, word for word it'sin there - we're really happy with that."

He and his co-leader, Tariana Turia, said their attempt to have Section 9 apply to private investors was misguided.


Dr Sharples said the Maori Party would have welcomed that, but it was not their "main concern".

"The fact is that we cannot hold private investors to the Treaty, they're not signed up to it, we signed the Treaty with the Crown," Mrs Turia said.

But iwi leader Haami Piripi of Te Rarawa said the protections were meaningless.

"There's nothing here for Maori. It's a sleight of hand. It cuts us out of the 49 per cent.

"The Crown will be able in the future to divest itself of half the SOE assets without having to account for the Treaty interest in it."

Mana Party leader Hone Harawira said the compromise meant the Maori Party should resign from the coalition. "Anything less is a sell-out of the Treaty."

Meanwhile, the new legislation takes steps to bring Mighty River, Genesis and Meridian into alignment with companies listed on the sharemarket. That included removing their Official Information Act and Ombudsmen Act obligations.

"The mixed ownership companies operate in a competitive environment, and, once listed, will have comprehensive continuous disclosure requirements under stock exchange rules," Finance Minister Bill English said.

Under the new legislation the mixed ownership companies would not be subject to the corporate responsibility obligations either.

* Citizens' Initiated Referendums require a petition signed by 10 per cent of enrolled voters - just over 307,000 signatures.

* Organisers have 12 months to collect the signatures.

* The Government then chooses when the referendum is held.

* It is not bound by the result.

- additional reporting Yvonne Tahana