The Prime Minister is at loggerheads with Tuhoe, with the iwi saying it believed an agreement in principle on the return of the Urewera National Park was imminent.
A row has erupted over John Key's announcement on Monday that that deal was not going to happen, with the Maori iwi saying it has had the rug pulled out from under it after working with the Crown in good faith.
Tuhoe negotiator Tamati Kruger says he met with Mr Key in March this year to discuss settlement options and after talking through the vesting of the national park to the Tuhoe people, Mr Key said it was complex, but workable.
But Mr Key has ruled out Tuhoe's key claim for the return of the national park, between the Bay of Plenty and Hawke's Bay, saying it would not fit within the generally accepted principles of Treaty of Waitangi settlements.
Mr Kruger says the decision comes as a surprise, as the iwi was expecting the Cabinet to consider an initial deal on Monday.
Tuhoe says it has cancelled a hui, or meeting, on Friday which was planned months ago, where the iwi and the Crown were due to an agreement in principle.
The decision has also put Mr Key at loggerheads with Maori Party co-leader Tariana Turia, who has accused the Crown of acting in bad faith.
Mrs Turia says the Crown is creating a fresh grievance by not vesting ownership of the Urewera National Park in the people of Tuhoe and the decision is devastating.
Tuhoe says the Government has succumbed to fears about a public backlash. It says the National Party obviously feels it would have been too risky politically.
PM says Government clear with Tuhoe all along
The Prime Minister says the Government was clear with Tuhoe all along about the chances of the iwi securing ownership of the Urewera National Park.
Mr Key says it would have been too challenging and would have set a precedent for other claims.
Tuhoe negotiator Tamati Kruger says the negotiating team had found no legal or practical barrier to vesting ownership with Tuhoe.
However, Mr Key says there was never any agreement in principle.
"In negotiations, we're always hopeful that we'll get what we want in terms of our side of the bargain. We've made it clear for a long period of time this is challenging and there's been lots of options and there'll be a lot of other options presented."
Mr Key says he believes there is still the genesis of a very good deal on offer for Tuhoe.
Mr Kruger says the decision provides fuel for iwi radicals who have already made their displeasure known. However, he says he wants to see if a way can be found through the impasse by negotiation.
The Labour Party has accused the Government of stringing Tuhoe along over the ownership and management of the Urewera National Park.
Leader Phil Goff says Tuhoe were led to believe there was an agreement in principle to hand over the park, but the Government reneged on it.
