Ngai Tahu leader Mark Solomon is refusing to back Maori Council legal action over partial asset sales despite personal misgivings.
The council will argue in the High Court on Tuesday that the government's plan to sell shares in energy companies before it sorts out water rights is illegal.
The court challenge was launched after the government announced it wouldn't change its plan to sell 49 per cent of energy companies despite a Waitangi Tribunal recommendation that the plan be halted until Maori claims to water are determined.
However, Mr Solomon told TVNZ's Q+A programme on Sunday that Ngai Tahu, the country's richest iwi, would prefer a negotiated agreement despite the council's action being supported by Tainui and the Maori king.
"All it does is give the lawyers the new Mercedes every year."
The first share float - 49 per cent of Mighty River Power - is due to take place between March and June next year.
He also disagreed with the tribunal's ruling, saying the Crown already had acknowledged Maori rights to water.
Maori had proprietary rights to water as first people of New Zealand and deserved input into its governance and allocation but they did not own water by "title", he said.
"That is a Pakeha concept. When I look at the concept of ownership within a Maori paradigm, I believe it's about having a right of use to use the fruits.
"We cannot stand up and ask the government to recognise our rights and interests in water by advocating the taking away of rights and interests of other people."
He admitted that personally he was "a bit uncomfortable" with selling shares in state assets but said it would not undermine Ngai Tahu's water rights.