Prime Minister John Key says it is likely the Foreshore and Seabed Act will be repealed, but he says no final decisions have been made.
Cabinet on Monday discussed its response to a review of the Act, which recommends scrapping the legislation.
It appears a decision, in principle at least, has been made, though Mr Key says no conclusions have been reached.
He says the issue to be decided is what the law should be replaced with, and no final decisions will be made until that matter has been worked through.
Talks are underway with iwi leaders as well as the Maori Party and other parties in Parliament.
Mr Key says it would be in New Zealand's interests if there was cross party support for any replacement legislation.
Attorney General Chris Finlayson is leading the process.
Review reported 4 months ago
The ministerial review of the Foreshore and Seabed Act reported back at the beginning of July this year.
The three-member team, led by former High Court judge Edward Durie, recommended that the law be scrapped.
New legislation will have to somehow recognise the customary rights of Maori iwi and hapu to the foreshore and seabed while guaranteeing public access to the country's beaches.
Important for Maori to have say - Sharples
Maori Affairs Minister Pita Sharples says it will be important for Maori to have a say on what should happen next if the Act is repealed.
Dr Sharples expects there would be a series of meetings on the issue, and says iwi leaders are already involved.
Labour MP Shane Jones says the debate surrounding the proposed repeal will come down to two principles.
Mr Jones told Waatea News New Zealanders love of nature must be balanced with Maori rights.
A Maori spokesperson on the act says any replacement of the law should assume Maori customary rights.
John Mitchell represented eight South Island iwi in 2001 when contesting that the Marlborough Sounds foreshore and seabed was customary land.
The Court of Appeal allowed iwi to argue that case for ownership, sparking protests throughout New Zealand. The Labour Government at the time passed legislation that confirmed Crown ownership of the foreshore and seabed.
Mr Mitchell told Morning Report on Monday that replacement legislation should ask the Crown to prove ownership by showing that customary rights have been extinguished.
He believes the Maori Affairs Amendment Act 1993 could offer a legal framework to satisfy Maori and those concerned about access.
Mr Mitchell says the current situation where Maori have to prove ownership has been an ongoing burden.