Maori Affairs Minister Pita Sharples is calling for Local Government Minister Rodney Hide to resign over Auckland's Independent Maori Statutory Board.
The unelected board was established as part of the amalgamation of eight councils in the region on 1 November last year. It was created to represent Maori interests, with members able to sit on some council committees.
The board is taking court action, believing that the Auckland Council has broken the law by cutting $2.5 million from a previous funding agreement which was later found to be invalid.
Last week, the council voted unanimously to give the board $5.4 million over 20 months. When the debate was held again on Monday night, the figure was cut to $2.85 million and some councillors questioned the board's role on council committees.
On Tuesday, the Maori board said it would ask the council to join it in court action aimed at resolving their disagreement over funding and powers.
Mr Hide said he is disappointed the board is going to court and has some sympathy for the position Auckland Mayor Len Brown and the council now find themselves in.
The minister said he viewed the creation of the Maori board as divisive and did not support it.
Maori representation on the council has long been a point of contention. In 2009, the Government declined a Royal Commission recommendation for three Maori seats and 7000 people took to the streets in protest.
Dr Sharples played a key role in drawing up the current format and says he is disappointed with the wrangling over the funding for the Maori board.
However, he said it was Mr Hide's legislation which created the board and the minister should stand by it or quit.