Plans to set up one of the largest ocean sanctuaries in the world breach Treaty of Waitangi obligations and extremely late-notice consultation was cynical, the Maori Fisheries Trust says.

The strong criticism comes after Labour said the Government's "care free" approach to establishing the Kermadec Ocean Sanctuary could lead to legal challenges from iwi.

Environment Minister Dr Nick Smith dismissed that, saying consultation had been adequate and the idea well-received.

However, today the Maori Fisheries Trust, Te Ohu Kaimoana (TOK), has issued a statement slamming the Government's "cynical" consultation on the project.

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"To inform Te Ohu Kaimoana (as the agent of the Treaty partners) a mere 10 hours before the Prime Minister's announcement at the United Nations and call it consultation is cynical," the joint statement from TOK chairman Matiu Rei and chief executive Peter Douglas said.

The nature of the settlement between the Crown and iwi over fisheries meant it was not relevant whether iwi or TOK and its fishing companies had not fished in the area of the proposed ocean sanctuary for some years.

"Iwi rights go beyond other participants in the fisheries sector and include quota share interests in fisheries based on QMA10 - the Kermadec zone. The nature of those rights means all iwi have a commercial interest in this area."

TOK was involved in the establishment of a "Benthic Protection Areas" in 2007, which banned all fishing that made contact with the sea floor over the entire Exclusive Economic Zone around the Kermadec Islands.

"Our ethos and the basis for Te Ohu Kaimoana in the Maori Fisheries Settlement is to act as kaitiaki on behalf of iwi to protect and enhance the Fisheries Settlement," Mr Rei and Mr Douglas said.

"Sustainable fishing is the core tenet to that ethos. The Government has gone much further than it needed in this instance. Fishing within the Kermadec zone is well within sustainable limits."

Asked if legal action was on the cards, a spokesman for TOK said: "it might be something that iwi consider if the Government continues to shirk its responsibilities and obligations".

Prime Minister John Key on Tuesday announced that the waters around the Kermadec Islands to the north of New Zealand will become one of the largest ocean sanctuaries in the world.

The protected area will be twice the size of New Zealand's land mass and 50 times the size of the country's largest national park.

A Cabinet paper on the establishment of the Kermadec Ocean Sanctuary says that while the protected area will comprise 15 per cent of New Zealand's EEZ, there is little viable commercial fishing in the area so no compensation should be paid.

After Labour fisheries spokesman Rino Tirikatene said the lack of consulation with iwi could lead to legal challenges, Dr Smith said such claims ignored the "strong support of iwi for the new protection".

"Ngati Kuri and Te Aupouri - the two northern iwi with connections to the Kermadec Islands - both indicated their strong support for the new sanctuary prior to its announcement. These two relevant iwi have been pushing for the sanctuary proposal and so Labour's criticism that they were not consulted does not make sense," Dr Smith said.

"Te Ohu Kaimoana were also advised of the Government's decision prior to its announcement. Official records show that no fishing by Te Ohu Kaimoana has occurred in the sanctuary area over the past five years. This is a very remote area where there is fishing carried out by only a few companies, totalling 20 tonnes each year - equivalent to just 0.004 per cent out of New Zealand's average annual commercial catch of 449,000 tonnes.

"All New Zealanders, including iwi and Te Ohu Kaimoana, will have the opportunity to make submission when the legislation to create the Kermadec Ocean Sanctuary is introduced to Parliament."

Two fisheries settlements in 1989 and 1992 granted Māori control over one-third of New Zealand's commercial fisheries.