Opposition parties are renewing their call for the government's partial asset sale programme to be dropped after the Waitangi Tribunal found it needed to sort out Maori water rights first.
The government's plan to partially privatise energy companies Meridian, Genesis and Mighty River Power drew opposition from the Maori Council, which took a claim to the tribunal saying Maori had ownership rights over water.
The tribunal's interim report, which is non-binding, says Maori do not "own water" but can claim "residual property rights" which must be properly acknowledged for the government to meet its obligations under the Treaty of Waitangi.
"We consider that the sale must be delayed while an accommodation is reached with Maori."
Green Party co-leader Russel Norman says the government should drop the asset sales rather than ignore the recommendations, which could lead to court battles with iwi, or do a deal with iwi.
The decision adds to problems with ballooning sales costs, risks over the possibility of the Tiwai point aluminium smelter closing, Solid Energy and Air NZ not ready for sale and more than 200,000 people signing a petition calling for a referendum on asset sales, he said.
"This is a crisis that National has brought upon itself by trying to push through asset sales that New Zealanders do not want," Dr Norman said.
NZ First leader Winston Peters says Prime Minister John Key's decision to pursue the asset sales had made an issue out of the ownership of water.
"Could he not see that a tribunal's findings are no way to formulate public policy? In this case that would be the role of the court system," he said.
"This whole mess tells you volumes about John Key's incompetence over the government's ill-conceived flagship policy which was never a solid idea."
A spokeswoman for State-Owned Enterprises minister Tony Ryall says ministers will consider the finding as they prepare to make decisions in early September about the proposed Mighty River Power share offer.