Hawke's Bay iwi, Ngati Kahungunu says Ngai Tahu has pulled out of a multi-million dollar water storage scheme in its rohe because of fears about a lack of investor backing and upholding water quality standards.
The South Island iwi announced its decision about the Ruataniwha dam project on Monday afternoon.
In a statement Ngai Tahu said it's ending an agreement with the Hawke's Bay Regional Investiment Company because the Council hasn't found an investor to replace Trustpower.
Ngati Kahungunu chair Ngahiwi Tomoana said Ngai Tahu was unnerved by Trustpower pulling out in March.
He said there's a range of reasons why it's walking away.
Mr Tomoana said initially the council had decided that no ratepayer money would be used for the scheme, but now it appears more and more ratepayer money may be required.
He said Ngai Tahu was also uneasy about the deal because the water quality standards would be far lower than that of its rivers in the Otago region.
MrTomoana said he was told of Ngai Tahu's decision last week.
Ngati Kahungunu and Ngai Tahu reached an agreement last year, in which the South Island iwi vowed it would not proceed as an investor if the Hawke's Bay tribe wasn't happy.
Ngai Tahu was in regular talks with Ngati Kahungunu about the water storage scheme, but did not disclose any commercially sensitive information.