Maori Party co-leader Tariana Turia has questioned the honour of Prime Minister John Key's Cabinet over the decision to take ownership of the Urewera National Park off the negotiating table with Tuhoe.

In what appears to be a serious strain with the Government, she also disputed Mr Key's claim yesterday that she was "fine" when he talked to her about it on Sunday night.

Asked last night if her party could continue in coalition with National, she said "we began that discussion on Sunday night", but hadn't talked to Mr Key since.

When Mr Key was asked yesterday if the relationship with the Maori Party was in jeopardy he said "not in the slightest".

Mr Key announced after Cabinet on Monday that ownership of Te Urewera National Park was unacceptable to the Government in any settlement package.

Tuhoe had expected the final offer, including ownership, to be approved, and had pencilled in a hui for Friday for the signing of an agreement in principle. That hui has been cancelled.

Tuhoe leaders yesterday implied that Mr Key led them on when he told them at a Beehive meeting in March that vesting ownership of Te Urewera National Park was "workable".

Mrs Turia called the decision appalling and a national disgrace and questioned the honour of the Cabinet.

"Tuhoe negotiators have behaved honourably right throughout this process so to have the rug pulled and take them back to square one I don't think is very honourable actions."

Mr Key said yesterday in Wellington that he had telephoned Mrs Turia on Sunday night to discuss what he was planning.

"She was totally fine. Look, she understands the challenge, disappointed, but understands the challenges."

Mrs Turia appeared shocked yesterday when told of Mr Key's comments.

"I am making it very clear I am not fine with this decision," she told TV3.

Mrs Turia said the Government had to reconsider its decision.

But Mr Key said there would be no reconsideration.

Tuhoe board member Matt Te Pou told the Herald the decision was a u-turn by a "team of one" and it showed "a lack of courage".

Lead negotiator Tamati Kruger said he and others had attended a meeting in Mr Key's Beehive office in March where Mr Key had described the vesting of the park in Tuhoe as "complex but workable".

"At the end of the discussion he expressed that the biggest issue for the Government was the politics of it all, the politics of selling it, and we agreed."

Mr Kruger said the tribe had wanted to vest it in one or two ancestors "to safeguard inalienability" and Mr Key had been interested in the legal issues.

Mr Kruger also revealed that after the tribe had rejected an initial offer by the Crown for co-management last August Government officials had begun work on the ownership issue - officials from the Crown Law Office, Te Puni Kokiri, Department of Conservation and the Office of Treaty Settlements.

"We were all focused on it and who will do this work.

"We were all making progress and then at the 11th hour, boom."

The Weekend Herald reported that National was split over the issue of ownership, and named Murray McCully and East Coast MP Anne Tolley as some of those with concerns.

It also reported on the National Party regional conference in Masterton at the weekend where ministers defended the Government's record on policy advances on the Maori agenda, including Treaty of Waitangi settlements.

Labour leader Phil Goff said the Government had raised expectations and should have been straight with the tribe.