Maori Party co-leader Tariana Turia said today that the party would "have to consider its position with the Government'' if a Treaty clause is not extended to those state owned enterprises tagged for partial sale.
John Key said he did not expect it to be a deal breaker and believed a solution would be found.
He said section nine was not appropriate for the mixed ownership model, because private shareholders could not be bound by it.
It was possible a more specific Treaty clause could be included.
"I'm extremely confident the Maori Party will remain part of the Government for the next three years."
The Minister of Finance Bill English had met the Maori Party co-leaders this afternoon.
Mr Key said the Government was not looking to discharge its responsibilities under the Treaty.
He said section nine was "largely symbolic" and he could not find a single example of where it had been used.
The Government will start consulting with iwi next week on the partial state asset sales, including on whether section nine in the State Owned Enterprises Act should also apply to the mixed ownership model companies. That clause stipulates that the Crown must not act in a manner inconsistent with the principles of the Treaty of Waitangi.
"If they remove section nine there will be no reason for them to consult with Maori about these issues, so they would actually be denying that the Treaty exists and we are not prepared to accept that,'' Mrs Turia said.
State Owned Enterprises Minister Tony Ryall has said that provisions protecting land under Treaty claims would apply under the new model. However, section nine was under review.
Maori Party co-leader Pita Sharples said those provisions did not go far enough and would not cover issues such as water rights, which Maori were currently discussing with the Government.
Speaking to media this afternoon, Labour leader David Shearer said the situation raised questions about the Government's stability.
"The Prime Minister, John Key, electioneered on the fact that this was going to be a stable Government and within one month, effectively, of this Government coming into operation, it's already seen to be unstable,'' Mr Shearer said.
"It's very much reliant now, if the Maori Party did walk away, on Act to hold the Government together, it makes it very unstable I would argue.''
Mr Shearer said he was surprised National had not made it clear to the Maori Party what was coming down the track during the government negotiations.
"I would have expected, more or less, for the Government to tell the Maori Party this was coming and given them a heads up.''
Asked whether he thought there should be Treaty provisions in the legislation, Mr Shearer said Labour disagreed with any sale of state assets so what was in the legislation was beside the point.
