The Maori Council has agreed in principle to taking court action over the government's decision to partially privatise Mighty River Power.
Prime Minister John Key announced on Monday the government was going ahead with the partial privatisation of Mighty River Power and there would be no more negotiations with Maori.
The Maori Council had earlier threatened to seek a High Court injunction to stop the sale of 49 per cent of the shares in the state-owned hydro company unless water rights are settled.
Maori Council co-chairwoman Donna Hall told Radio New Zealand on Tuesday the council had spoken to representatives of the Maori King and various hapu and iwi about the decision to take legal action.
"The view from all of these gatherings is that there is no choice now but to seek review of the government's decisions through the courts," she said.
The council will speak to groups in the central North Island which have not yet had the chance to have their views heard on Thursday.
However, the council has already agreed in principle to filing court papers against the sale before the end of the week.
Finance Minister Bill English said on Monday the sooner legal action gets underway, the better.
"We may as well sort it out," he said.
"Our legal advice is that we've met all our obligations under the Treaty of Waitangi."
Mr English last month held a series of hui with iwi and hapu to discuss the Waitangi Tribunal's concept of "shares plus" for Maori with interests in the water Mighty River Power uses.
The idea was that Maori would get shares carrying powers "above and beyond" those of other shareholders, although details were never explained.
Mr English says he didn't hear anything that changed the government's conclusion that "shares plus" was unworkable.
Mr Key said officials had started work on preparing a 49 per cent share float between March and June next year.