The Government's plans to sell shares in state-owned power companies before settling the question of Maori water rights is being challenged in the High Court at Wellington.
The Maori Council and Waikato iwi have called for a judicial review in a bid to block the sale of Mighty River Power until the claims are resolved.
The Government aims to partially privatise Mighty River Power between March and June next year, followed by Genesis Energy and Meridian Energy.
The Waitangi Tribunal issued a report in August saying that Maori still have ownership rights to bodies of water, or in legal terms, residual proprietary rights. The Government argues the sale does not get in the way of recognising Maori water rights.
Lawyer for Waikato River Trust, Helen Cull QC, told the court on Monday the Government's decisions were illegal.
She said iwi maintained the share float was inconsistent with the Treaty of Waitangi.
"The decisions of the Crown to remove Mighty River Power Ltd from the State-Owned Enterprises Act and proceed to offer for sale 49% of the shareholding of Mighty River Power Ltd, without establishing a system or mechanism to protect the applicants' claims and interests, are inconsistent with the principles of the Treaty of Waitangi and are therefore unlawful."
Ms Cull told the court that once an asset was in private hands, it was very difficult for Maori to enforce their rights.
Justice Young questioned why the sale would get in the way of recognising Maori water rights, as the Government could still amend the Resource Management Act to accommodate them.
Ms Cull said the experience of land claims had shown that once the asset was in private hands it was very difficult for Maori to enforce their rights.
Manu Paul 'disappointed'
Maori Council chairman Manu Paul says he is disappointed iwi have been forced to fight the Government in court for their interests in water to be recognised.
Speaking outside the court, Mr Paul said: "So the only way we're going to have to talk to them is through the High Court, and we find that disappointing that we have to drag the Government through the court to get them to talk to us."
Mr Paul says the issue at stake is of fundamental significance for the whole country and should be tested in the highest court in the land.
Maori Council case based on tribunal report
Before the hearing, Maori Council solicitor Donna Hall said the case was based on the Waitangi Tribunal report and the council would seek for a parallel ruling from the High Court.
Ms Hall says the action is being taken on behalf of all Maori and while finding funding is hard, the council has received financial support from claimants, Maori trusts, organisations, and incorporations.
Meanwhile, an Auckland hapu says it would consider helping to fund the Maori Council's legal action.
Ngati Whatua o Kaipara is not one of the claimants represented by the council but tumuaki (chief executive) Jason Fox says the hapu could possibly do more than symbolically support the case.
He says council members would get a good reception if they came and talked to trustees of the hapu face to face.