The Hawke's Bay Regional Council's investment arm is joining the Department of Conservation (DOC) in seeking an appeal to the Supreme Court over a decision relating to a land exchange for the Ruataniwha Dam.
The council wants to dam 22ha of formerly-protected land, flood it and give the department 170ha of nearby farmland in return.
The Court of Appeal ruled last month the process of acquiring the protected conservation land for the $900 million irrigation scheme was unlawful and ordered the Director-General of Conservation to reconsider his decision on the land swap.
That hearing took place after Forest & Bird appealed against a High Court decision upholding the land swap.
Hawke's Bay Regional Investment Company (HBRIC) chairman Andy Pearce said the project would bring several benefits to the community.
"There is a strong commitment from HBRIC, and those involved, to deliver the Ruataniwha Water Storage Scheme and its wide-ranging environmental, social and economic benefits."
Mr Pearce said his organisation would join DOC in applying for an urgent hearing in the Supreme Court to seek leave to appeal against the Court of Appeal's decision.
Land swap could set precedent - Forest & Bird
Forest & Bird acting chief executive Mike Kotlyar said many New Zealanders would be baffled by the Department of Conservation's legal bid to try and overturn the Court of Appeal decision.
"The ultimate outcome sought by this challenge is to enable the controversial Ruataniwha Dam to proceed.
"We doubt New Zealanders would consider it to be the Conservation Minister's role to support irrigation schemes like this.
"If it goes ahead, this land swap will set a precedent for up to one million hectares of specially protected conservation land, creating the possibility that these areas can be reclassified and destroyed."
Forest & Bird said the land that would be swapped would include mature forest that was home to threatened wildlife, including long-tailed bats and falcons.