An official Government event to announce the sealing of a "horrendous" gravel section of state highway on the road to Lake Waikaremoana has been cancelled at the last minute because of iwi opposition.

The Provincial Growth Fund's decision has left the district's mayor and long-campaigning residents on the road aghast.

Parts of State Highway 38, from Wairoa to Onepoto - a settlement on the shores of Lake Waikaremoana - have already been fixed, but patches making up about 10km are yet to be sealed.

That's comparable with 12km of unsealed road on the famous Forgotten Highway from Stratford to Taumarunui,