Cabinet has reaffirmed its decision against having reserved Maori seats on Auckland's new super city council, and a crisis over the divisive issue has been averted.
The leaders of the Maori Party and ACT, who held strongly opposed views, have agreed to work together to find other ways for Maori to engage with the council.
Prime Minister John Key announced the Cabinet's position today, saying it had examined the decision it made in April after receiving "extensive requests" for Maori reserved seats.
"It is Cabinet's view that there should not be reserved Maori seats," Mr Key said.
"There's no doubt there's going to be representation, it's just not going to be in the form of reserved Maori seats."
The Maori Party argued strongly for at least two Maori reserved seats, but co-leader Pita Sharples said he didn't feel betrayed by the decision.
"Not really because this is politics and I understand why they've done it," he told reporters.
"I'm a little bit brassed off but the battle isn't over."
Dr Sharples said his party's support agreement with National would not be affected and he had no intention of resigning as minister of Maori affairs.
"I'm here for ever. This leaves us in the same relationship as it was yesterday, except that we disagree pretty heavily with this."
ACT leader Rodney Hide, who had said he would resign as minister of local government if the Cabinet reversed its decision on reserved seats, denied he had held the Government to ransom.
"I said I would have to step aside because ACT stands for one law for all," he said.
"This was a decision which was made on April 6 and which has been reconfirmed today."
Mr Hide said he would work with Dr Sharples on ways for Maori to engage with the new council.
Dr Sharples also confirmed the arrangement, although he seemed less sure there would be close cooperation.
"Working together means I write what I think and he writes what he thinks," Dr Sharples said.
He is planning to put up an amendment to the legislation that will set up the council when the bill is debated in Parliament, and seeking support from MPs to insert reserved Maori seats.
Dr Sharples said Mr Hide should not have told Mr Key he would resign over the issue.
"That's got to bring pressure to bear on the prime minister," Dr Sharples said.
"This is clearly a political decision...the Government isn't risking its coalition arrangement (with ACT).
Mr Key said Dr Sharples and Mr Hide would consider several options for Maori to engage with the council.
They included a statutory board, a council committee and an advisory board.
He said the main reason the Cabinet did not want reserved Maori seats was because if that happened it should be implemented for all councils.
Another reason was that the National Party view was opposed to reserved seats.
Mr Key said Mr Hide's position was considered, but it wasn't a dominant factor.
Mr Hide and Dr Sharples attended today's cabinet meeting and put their arguments to ministers.
