A lawyer for the Crown has told the Supreme Court the sale of Mighty River Power will not have an impact on the Crown's ability to respond to Maori claims relating to water rights.
The Maori Council and a group of Waikato Maori trusts are appealing against a High Court ruling that there is no connection between the sale of shares in Mighty River Power and the need to address Maori claims to water.
The Government plans to sell up to 49% of the state-owned hydro generator this year if the court ruling is in its favour.
The argument for the recognition of Maori interests in freshwater has also been before the Waitangi Tribunal.
Maori Council lawyer Colin Carruthers, QC, told the Supreme Court the share sale would significantly impair the Crown's ability to address Maori water claims.
He said if the Crown owned 100% of a state-owned enterprise it was in a better position to do so, whereas if 49% was in private ownership the Crown would also have to consider the interests of the minority shareholders.
Crown lawyer David Goddard said the proposed sale regime was largely accepted by the Waitangi Tribunal, and that must have some bearing on whether the Crown is taking reasonable steps to deal with the issues.
Maori sovereignty and Mana flags were flying outside the Supreme Court on Thursday. A number of prominent Maori have travelled to Wellington for the hearing, including Tukoroirangi Morgan of Waikato-Tainui and Roimata Minhinnick of Auckland iwi Ngati Te Ata.
The hearing continues on Friday.