The Government and the Maori Party are going to look for a way through the impasse over the Kermadec Ocean Sanctuary, and in the meantime the legislation setting it up will be delayed.

Plans to establish an ocean sanctuary in the Kermadecs have been put on hold, with the Government delaying a law change after failed negotiations between Maori and the Crown over fishing rights.

Prime Minister John Key has called for "cool heads" over the issue, after ACT leader David Seymour withdrew his support for the bill and the Maori Party would not rule out leaving the Government over the deal.

A legal challenge against the Kermadec ocean sanctuary will continue after negotiations between Maori and the Government over fishing rights failed to reach a compromise.

NZN Video Te Ohu Kaimoana will continue legal action against the government over the Kermadec Ocean Sanctuary after the two were unable to resolve "major Treaty differences" relating to fishing rights in the region.

On Wednesday morning, Te Ohu Kaimoana confirmed the Maori fisheries trust would continue its legal action in the High Court against plans for the sanctuary, and lodge a complaint with the Waitangi Tribunal.

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* Attempt to put brakes on Te Ohu Kaimoana challenge to Kermadec Ocean Sanctuary

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The trust announced it would take legal action over the Kermadec plans earlier this year, claiming all iwi should have been consulted and the Government had no right to override fishing rights under the Treaty of Waitangi.

The Government's plans to eliminate Maori fishing rights in the Kermadec ocean sanctuary has angered some iwi.

Maori Party co-leaders Te Ururoa Flavell and Marama Fox said they were disappointed with the failure of negotiations.

"They [Maori] already don't fish that area, but what they're saying is that actually you just can't wipe it away with one piece of legislation because this goes to the heart of every Treaty settlement that we have ever made," Fox said.

The pair would not rule out withdrawing their support for the Government over the Kermadecs issue. Asked whether the matter was the closest the Maori Party had come to leaving the Government, Flavell said it was "right up there, it's right up there".

John Key is unworried about legal action over Kermadec ocean sanctuary plans.

'AS LONG AS IT TAKES'

However, the party would not make any decisions until discussions with the Government were finished.

"It is serious, it's at the very high end, but we have an agreement from the Prime Minister now, that's what matters, that we have an agreement with the Prime Minister to continue those discussions that have broken down," Flavell said.

The party was happy to work for "as long as it takes" to find a solution, he said.

"All Treaty settlements take a long time, they are hard negotiations - this one was a hard negotiation, it took a long time.

"For some people, it's 20 years - a couple more weeks, a couple more months is not going to make too much of a hole in this whole debate."

ACT leader Seymour said he could not support the Kermadecs legislation because it violated the property rights of Maori and other fishers, even if they had not recently used the area.

"The only greater good in drawing lines on a map and saying 'Thou shalt not fish here' is good publicity for the Government.

"I'm into conservation, not publicity, and I'm into property rights and due process, rather than taking away property rights by legislative fear."

'LET COOL HEADS PREVAIL'

Key said the Government would delay the Kermadecs legislation while it held discussions with the Maori Party to see if a compromise could be reached.

"We got quite a long way with [Te Ohu Kaimoana] but not quite over the line, so let's just take a step back, let cool heads prevail, let's have discussions with the Maori Party and see if we can find a way through."

Environment Minister Nick Smith said he would not apologise to Te Ohu Kaimoana for a lack of consultation before the sanctuary plans were announced, and would not have changed his approach given another chance.

"No, not particularly - my experience with marine protected areas is they're always bumpy, they're always very challenging...in my view, everybody's in favour of sanctuaries except where they affect them."

People with quota rights did not have a monopoly over the sea space, and the Government had always retained the right to create areas of marine protection, he said.

'ABUSE OF POWER'

Te Ohu Kaimoana chairman Jamie Tuuta said the commission had offered a compromise where Maori would "shelve" their fishing quota in the Kermadecs but maintain their rights, which the Government had rejected.

"Unfortunately, the Minister [Smith] accepts nothing but legal nullification of all Maori rights in the Kermadec region.

"We have made it abundantly clear, over a number of meetings, that such a position is unacceptable to iwi. We therefore have no choice but to step back from discussions."

Iwi were committed to marine conservation, but not the Government's "abuse of power" in taking away rights guaranteed under a Treaty of Waitangi settlement.

"In this respect, Maori and iwi are both pro-conservation and anti-theft."