The Government's discussions with Ngai Tahu over its forestry Treaty of Waitangi settlement went against legal advice and could set a dangerous precedent for other settlements, Labour MP Charles Chauvel says.
The South Island iwi wanted compensation for what it saw as a loss in the value of forests received as part of its historic Treaty claim settled more than a decade ago.
The iwi said an emissions trading scheme (ETS) would make the conversion of forest land into other uses, such as dairying, less economic, therefore lowering the land's value.
Four other iwi were similarly affected but Ngai Tahu has the most significant holdings.
Climate Change Minister Nick Smith said Ngai Tahu's issue was around whether the Government at the time breached the good faith of negotiations and withheld information about the value.
In Dr Smith's view it was a "cock up not a conspiracy".
Ngai Tahu was prepared to take the matter to court, or back to the Waitangi Tribunal and the Government wanted to "sit down and talk" about it.
The Government must be free, post Treaty settlements, to make changes without having to reopen negotiations, Dr Smith said.
Ngai Tahu and the Government will continue negotiations but there would be no changes needed to the ETS bill, he said.
Mr Chauvel said by entering discussions the Government paved the way for other Treaty settlements to be re-opened.
"Would going to court have been a better way to go than opening all settlements up to questions?"
It set a "very unfortunate" precedent," he said.
The Ngai Tahu issue "wasn't a cock up or a conspiracy, it was an agreement in good faith".
The Government was advised by Queens Counsel Helen Aikman that there had been full and appropriate disclosure during the initial negotiations, Mr Chauvel told NZPA.
"I'm not sure it's a good idea to ignore Crown legal advice in order to get a political deal with another party."
Mr Chauvel was alluding to an agreement between National and the Maori Party for their support of the ETS legislation through its first reading.
Dr Smith said National had not concluded negotiations with Maori Party.
The Maori Party had been concerned with the affect of the ETS on low-income people, he said.
