Chief Justice Sian Elias has floated the prospect of restraining the government to selling no more than 25 per cent of state-owned power companies while it sorts out a long term solution to Maori claims to freshwater rights under the Treaty of Waitangi.
Her comments came at the end of the first morning of two days' scheduled hearings in the Supreme Court on the New Zealand Maori Council's challenge to the government's partial assets sales policy.
It followed lengthy questioning of the council's lawyer, Colin Carruthers QC, about the responsibility for finding a means of redress for Maori grievances lies with the government rather than Maori claimants.
"A protective mechanism could be that the Crown will only divest 25 per cent until there's some resolution," said Dame Sian.
Such an outcome would put a serious dent in the government's plans to raise as much as $4.85 billion from the sale of up to 49 per cent of Mighty River Power and Meridian Energy, valued at $3.3 billion and $6.5b respectively, before the end of this year.
For a sale of just 25 per cent of the two, the government might reap only around $2.4b.
It intends committing capital raised by the sales to public infrastructure and facilities instead of increasing government borrowing.
Mr Carruthers had argued earlier that even with majority control of 51 per cent, the government would be weakened in its ability to force Treaty settlement terms on partially privatised companies, leaving Maori capacity to seek redress "significantly impaired".
The Maori Council is appealing a High Court decision not to allow the cabinet's decision to proceed with asset sales to be judicially reviewed.