The Waitangi Tribunal's interim direction this week that the Government delay the sale of Mighty River contained a warning it is not entirely toothless and can order the Government to make compensation in some circumstances, lawyer Mai Chen says.

Pressure on the Government to delay its partial asset sales programme grew this week after the tribunal issued the direction at least until it delivers its full findings on a water rights claim next month.

Prime Minister John Key raised temperatures last month when he said his Government could ignore the tribunal if it made such a recommendation. However, his language has been far less inflammatory since the tribunal on Monday came out with exactly that interim direction.

Mr Key says his Government will act in "good faith" as it considers the tribunal's interim findings and will meet the Maori Party on Monday to discuss the report.


He was unwilling yesterday to speculate on whether the tribunal's September report or any subsequent court action would delay the Mighty River sale, which is slated for some time between next month and early December. The report could potentially still leave time for the float, which the Treasury says could take place in the first week of December at the latest.

But constitutional law expert Ms Chen said Mr Key's optimism was misplaced.

"All I see is we're going to be in court by Christmas. If the tribunal releases something final at the end of September it will need to be properly considered by the Crown - that might take them a couple of months.

"If they come back and say thank you we've considered it and it's full steam ahead, then of course the NZ Maori Council have already said they'll challenge it."

Ms Chen said that although - as Mr Key had previously stated - the tribunal's findings did not tie the Crown, its report this week "significantly" included a reminder that it could make binding recommendations.

That power relates to particular "memorialised" land held by state-owned enterprise but earmarked for potential future Treaty settlements.

In its report this week, the tribunal noted that the claimants had reserved the right to request it exercise its binding powers in respect of memorialised land used for the generation or transmission of hydroelectric or geothermal power.

Mr Key didn't believe Mighty River Power had relevant memorialised land and the company itself was unable to provide information about such land before deadline yesterday.

Labour Leader David Shearer said whether the Government ignored the tribunal's findings or delayed the Mighty River sale the asset sales programme was descending in to "a shambles that's continuing to just roll on".

"My feeling is the Government will face inevitably court action."