Families spokesman Bernie Monk, who yesterday talked of a re-entry bid by someone other than Solid Energy, said today he probably had to get on with his life.
"Do I want another three or four years of agony?" Mr Monk asked.
The Prime Minister, flanked by Energy and Resources Minister Simon Bridges and Acting Conservation Minister Nick Smith, said it was unlikely the police decision to not prosecute anyone for the 2010 disaster would be revisited.
A "more fruitful path" would be to look at a civil prosecution against individuals.
"It would come at a significant cost and one that families should not have to bear," Mr Key said, indicating he would seek an opinion from Crown Law.
"If we can do it we will do it, " he said, making it clear any action would be taxpayer-funded.
He said the Government would agree to surrender the mining permit, turn the area into conservation park and establish a memorial. Talks would begin soon to work out the details, with funding coming from the unspent $2m from the re-entry attempt.
He was also forced to defend Work Safe NZ, which had said it believed the re-entry was technically feasible. "It came down to a judgment call. Work Safe would not be liable (if the re-entry went wrong)," Mr Key said.
The Government accepted that Solid Energy's process had been "very rigorous".
The families asked that the Pike River site never be mined again, and the mining permit surrendered as a mark of respect.
Lawyer Colin Smith asked that the families also be guaranteed unfettered access in perpetuity, and that the mine site office buildings be turned into an educational facility for health and safety for educational purposes.
They also want the Government to reconsider introducing a corporate manslaughter provision within the criminal legislation.
Widow Anna Osborne was almost inconsolable after receiving the Solid Energy decision, and said it was not where she wanted husband Milton to lie.
"They deserve to be buried in a place of our choice. It's unjust and so unfair. We've been slapped in the face time and time again," Mrs Osborne said.
Jo Hall said the decision to surrender the mining licence meant fewer jobs for the West Coast, as six men currently worked at the site.
Solid Energy said it wanted to talk to them first about their future.
"(But) the men will rest safely knowing it will never ever be used (mined)," Ms Hall said.
Olivia Monk, clutching a photo of her brother Michael, said they had all taken photos to the meeting to "show to them this is personal".
"It was pretty powerful ... unfortunately, not enough to change minds."
Lawrie Drew, who lost son Zen in the disaster, said he was a realist and now it was time to start negotiating the future of the site.
"Hopefully, it will be a two-way street."
Earlier, there were calls of 'shame' from a small group of protesters as Mr Key arrived. They played music and held signs demanding re-entry of the mine.
Ashen-faced family members entered the meeting armed with pictures and with yellow ribbons pinned to their clothes.
Mr Monk brought with him a box of files ready to argue against the claims from Solid Energy that a re-entry operation was not feasible.
West Coast-Tasman MP Damien O'Connor said the Solid Energy decision would forever be "on the conscience of John Key whether he did all he could".
Green Party list MP Kevin Hague said Mr Key should never have given the families assurances he was unable to keep. "What director on a board, whose job it is to maximise profitability and who is likely to be worried about personal liability, would ever want to bear that risk?"
Grey District Mayor Tony Kokshoorn said: "The fuse was lit in 1998 when the Department of Labour did away with check inspectors. Greed and complacency were the powder that caused this disaster."
