A Te Arawa treasure being sold overseas for $2 million should be given back to Rotorua people for free, a kaumatua says.

The carving, part of the historic Hinemihi meeting house which survived the Tarawera eruption, has been lost to the people of Rotorua for more than 100 years.

It is now being sold at auction, prompting a race for money to be raised to bring it home.

The carving left New Zealand in the late 1890s after the Earl of Onslow, William Hiller, bought the entire meeting house as a souvenir.

The meeting house was moved to a country estate in Surrey but somehow the carving was separated from the meeting house.

It has been passed around and ended up as a fireplace surround.

Rotorua now has the chance to get the precious carving back but there are fears the city won't be able to match rich overseas bidders.

Te Arawa Maori Trust Board chairman and kaumatua Anaru Rangiheuea said the price was ridiculous.

The rightful, gracious thing to do would be to simply give the taonga back to the people of Rotorua, he said.

Mr Rangiheuea was disgusted with the way the carving had been treated, and said it should never have been separated from the meeting house.

Mr Rangiheuea said it would have been good to have had the carving back during the recent celebrations of the anniversary of the Mt Tarawera eruption as it was an important piece of history.

"A lot of people put value on things that don't belong to them."

He said Te Arawa wasn't in a position to pay $2 million for the carving.

"People are running around to see if we can raise some money."

The Government, the Rotorua Trust (formerly the Rotorua Energy Charitable Trust), Te Arawa and the Rotorua District Council are all involved with trying to bring the carving back to its rightful place.

Deputy mayor and trustee Trevor Maxwell said he would dearly love to see the carving back in Rotorua.

He said if something wasn't done the carving could be lost for another 100 years.

Jim Schuster, whose great, great grandfather Tene Waitere was one of the carvers on the meeting house, said he would like to see both the carving and the meeting house back in Rotorua.

Mr Schuster conceded it was a bit of a shock seeing the photos of the carving being used as a fireplace surround, but said Mr Waitere had carved fireplace surrounds during his time.

Mr Schuster said any attempt to buy the carving would have to be a combined effort due to the high price.

"None of our tribes have that sort of money.

"It would be good if it came home. I'd love to have the whole meeting house back but we'll get the carving home first and then try to get the rest back."

Earlier this year the Daily Post revealed Te Arawa was set to scour the country - and the world - to bring its treasures home.

The multimillion-dollar redevelopment of the Rotorua Museum of Art and History will have a special room dedicated to Te Arawa exhibitions.