Officials and the Chinese owner of a Wairarapa sheep station are deadlocked over public access to a forest hut and tramping route.

The extraordinary dispute will now go to independent mediation - the first time this has ever happened. If the row can't be resolved the Overseas Investment Office has the powers to order the property be sold.

Hong-Kong based Eric Chun Yu Wong bought the sprawling $3.3 million Kawakawa Station, at Cape Palliser, in 2015. The Overseas Investment Office approved the sale - which was signed off by National government ministers - but imposed conditions around tramping access.

Those conditions said the new owner must put in place access to the Aorangi Forest, as recommended by the Walking Access Commission. The forest park is home to the Putangirua Pinnacles, the eerie earth pillars featured in scenes in the film Lord of the Rings: Return of the King.

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But Wong has rejected all the recommendations made by the commission, a Crown entity, in the last three years. Curiously, he says granting access rights would impact on New Zealand's reputation overseas.

The station has barred trampers from walking 7 kilometres up the Otakaha Stream to reach the 53-year-old hut which was built by the Forestry Service and is now maintained by the Department of Conservation. That is a two hour walk and the ban means the six-bunk hut can now only be reached via a 10km, five-hour walk from the north, or an eight-hour tramp from the Pinnacles.

SUPPLIED NZ Walking Access Commission chief executive Eric Pyle. The Overseas Investment Office requires the commission to work with some overseas investors to open up their land to Kiwis.

Kawakawa station markets its own paid three-day walk, with accommodation in their own "historic" logging hut, which costs between $280 and $450.

"Kawakawa Hut is located in on public conservation land within Aorangi Forest Park, a popular destination for hunters and trampers located a short drive from Wellington ... [access would] open up the hut, and the Forest Park, to a whole range of new people, helping to bring nature and the outdoors to more of our community," WAC chief executive Eric Pyle said.

He added: "The commission ensures that any access we recommend is reasonable, and would not impose unfairly on overseas investors."

DEPARTMENT OF CONSERVATION Kawakawa Hut in the Aorangi Forest, South Wairarapa.

The WAC first opened negotiations after the purchase in June. In May 2016 it recommended public and cycling access, with dogs under control and unloaded firearms, from the main Cape Palliser road, alongside the left of the river, to the hut. Wong wrote back saying the recommendations were "excessive and unacceptable".

So officials returned to the site and in September 2016 made new proposals, noting that access with guns and dogs would be "problematic for the farming operation at Kawakawa Station".

The commission said it would work with the farm to secure access conditions - such as closure during lambing season - and developing signs and route markers.

Two months later Wong rejected the plans as "not reasonable". He offered alternative access tracks but those didn't give access to Aorangi Forest Park or the hut.

According to WAC papers, the commission didn't back down because the alternative route didn't provide "substantial benefit". The owner continued to reject the proposals and wrote back in February last year suggesting it was "likely to adversely affect New Zealand's image overseas as a place to invest".

The commission retained a lawyer and in November last year the Overseas Investment Office stepped in. After OIO officials reviewed the file they triggered a dispute resolution process, set out in the conditions of approval.

BAYLEYS Opening up Kawakawa Station to trampers and cyclists would help "to bring nature and the outdoors to more of our community".

The commission has met with FairWay, a company that handles conflict management, to get the process underway.

Pyle said the commission worked with landholders to find "practical solutions, and we're happy to compromise to ensure a solution can be found that works for all parties".

He rejected the suggestion that granting public access to Kawakawa Hut would have any adverse impact on New Zealand's image overseas. "On the contrary, improving access to the beautiful Aorangi Forest Park would be a win for all."

The commission was consulted on around 300 purchases through the Overseas Investment Office, since 2010. "If the Kawakawa Station dispute proceeds to mediation and/or arbitration, it will be the first time that any of these disputes have gone to that stage," Pyle said.

Land Information deputy chief executive Lisa Barrett said she had hoped walking access could have been settled within two years of the sale. LINZ manages the Overseas Investment Office.

"When granting consent, the Ministers took walking access into account. At the time consent was granted, the OIO considered it would be appropriate for the consent holder to consult with the Walking Access Commission to see if walking access could be protected and improved," she said.

Under conditions set for the purchase, both parties are encouraged to use mediation or arbitration. "The OIO appreciates that it is important that owners or leaseholders have fruitful discussions with the Walking Access Commission about appropriate walking access. Occasionally, this takes some time to address."

She said the office was "confident that this will help the parties to find an agreement".

Kawakawa Station is owned by Wong via Kawakawa Station Ltd. He's based in Hong Kong's Happy Valley. The company's other director, Masterton-based Philip Guscott, did not respond to questions.