Local Government Minister Rodney Hide says he has no intention of resigning over Auckland's Independent Maori Statutory Board.
Mr Hide won a battle last year for there to be no dedicated Maori seats on the Auckland Council, after threatening to resign.
An unelected board was instead established to represent Maori interests.
Now Auckland ratepayers are facing a legal bill for clarification of the statutory board's funding and powers.
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.
Mr Hide says it is a disappointing outcome and he did not expect board members to be given voting rights on the council.
Maori Affairs Minister Pita Sharples says Mr Hide should stand by his own legislation or resign.
Mr Hide says he has always objected to dedicated Maori representation in principle and does not intend to stand down.
Calls to clean up 'mess'
Councillor Mike Lee says the Government should step in and clean up what he says is the mess created with its legislation for the statutory board.
He says it is an appalling fiasco that a non-elected body would take legal action against the elected council, using ratepayers' money.
He says Mr Hide and Prime Minister John Key should take responsibility for fixing the law.
Another councillor Cameron Brewer says the only way to resolve the row is to get a definitive ruling on what reasonable cost actually means.
He says the council has been let down by poorly drafted legislation, with subjective wording.
Auckland Mayor Len Brown says he is confident the council and the board will find a path through the disagreement.
Mr Brown says he is keen that the two parties work closely on the matter.
He says ratepayers will have to foot the bill for any legal costs that are incurred.