National is playing down a high-stakes political battle between its support partners over Maori seats on the new Auckland council.
It has emerged that Local Government Minister and ACT Leader Rodney Hide told Prime Minister John Key in June he would resign as minister if the Government allowed any form of Maori seat on the yet-to-be-created council.
Cabinet had previously agreed in principle there would be no such seats, but at the June 3 meeting Mr Key had sounded him out on the possibility of Maori seats.
"It was a live issue and a prospect," Mr Hide said.
The Maori Party has been lobbying to overturn the Government's position and recent events show that Mr Key is seriously considering whether Cabinet should reverse its decision.
Mr Hide had told Mr Key that he could not compromise and still introduce the bill in his name, and would therefore have to stand aside.
Mr Hide had also assured Mr Key ACT would not threaten the stability of the Government and the confidence and supply agreement would remain in place.
His stance was not a threat, but a position of principle which Mr Key had to know about when decisions were made on the issue, he said.
Acting Prime Minister Tony Ryall said relationships between the parties were "great", but differences of opinion were not unusual.
"The coalition is going well, really focusing on the important issues facing New Zealand," Mr Ryall said.
"ACT's position is very well known to New Zealanders ... but he is very solidly behind the Government."
Decisions on the Maori seats were yet to be taken, he said.
Maori Party co-leader Pita Sharples said Mr Hide should not stake his future as a minister on a single issue.
"I would hate him to feel he has to step down over one little detail, if Maori seats are created, because that is now a very real possibility," Dr Sharples said.
He called on Mr Hide to let Cabinet and Parliament decide the issue and then live with it.
Dr Sharples said he would be disappointed if Maori seats were not created, but he would stay on to advocate for Maori interests as a minister.
Labour accused Mr Hide of grandstanding to lift his party's low poll ratings, but he said he had not intended to make his stance public.
Mr Hide said he was disappointed an email from National MP Tau Henare had been leaked to TV3 in which it had been wrongly claimed Mr Hide had been threatening the stability of the Government when it enjoyed only 1 percent support in the polls.
In the email, Mr Henare urges National MPs to back Maori seats, a reversal of its previous policy, saying there was public support for them.
Dr Sharples called on National MPs to listen to Mr Henare.
The Royal Commission which reported on Auckland's local government structure recommended reserved Maori seats but the Government scrapped that when it set out its plans for the city.
The Maori Party has been lobbying to overturn the Government's decision and both sides have been looking for a compromise.
Mr Hide's office said he would remain Regulatory Reform Minister and Associate Minister of Commerce, if he resigned as local government minister.
Maori Party co-leader Tariana Turia said Mr Hide was politicking with his promise to stand down and a final decision on the seats should be based on what was best for Auckland.
