NZ First leader Winston Peters thinks he has a solution to the Kermadec Sanctuary - a mixed model that allows for a small percentage of fishing to keep iwi and the fishing industry on side.

Hope for a Kermadec Sanctuary is back on the table and NZ First leader Winston Peters is confident he can do a deal with the Green Party by the end of the year.

The deal would involve a compromise from the Greens though – accepting that the sanctuary won't be a 100 per cent no-fishing zone.

The 620,000-square-kilometre sanctuary was considered dead in the water when Labour and NZ First joined forces to form a Government after the election.

SUPPLIED The sanctuary was considered dead in the water after the coalition Government was formed.

While the previous government's bill to establish it passed its first reading unopposed in 2016, iwi bodies and fishing companies subsequently filed legal action against it. NZ First, which has close ties to the fishing industry, raised serious concerns about the legislation.

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But there's renewed hope that the Green Party, a supply and confidence partner for the coalition Government, might get its wish after Peters and Environment Minister David Parker decided to work together to try to find a compromise.

JASON DORDAY/STUFF Green Party co-leaders Marama Davidson and James Shaw will have to sell a revised Kermadec Sanctuary to their members if they want anything resembling a marine reserve.

To keep the fishing industry happy and to ensure iwi with fishing rights under the Treaty of Waitangi are on board, Peters is proposing a mixed model that allows for roughly 95 per cent marine reserve and 5 per cent fishing.

Peters says it's entirely possible to preserve species while allowing a small percentage of fishing to keep interested parties on side.

He said the Greens would need to decide whether it was more important to have the best part of a sanctuary, or no sanctuary at all.

Asked how quickly Peters thought he and Parker could convince the Greens to get on board with a mixed model, he said he was optimistic a deal could be reached by the end of the year.

The Green Party is staying quiet on what work is being done.

In a statement, a spokesman said: "Our confidence and supply agreement commits us to using best endeavours to establish the Kermadec Ocean Sanctuary. Like other commitments in our agreement we are working alongside our Government partners to progress them."

Parker is also reluctant to talk about the work that's under way, other than to confirm he's working with Peters on a solution.

He wouldn't be drawn on whether he thought a deal could be done this year, let alone this term.

"I have an ambition to advance the issue because of mistakes that were made in the last parliament – it got out of control and it's my responsibility to try to sort out. I didn't delegate those responsibilities in the environment space, so I will try," Parker said.

Former prime minister John Key announced the sanctuary at the United Nations with much fanfare in 2015.

He promised it would be "one of the world's largest and most significant fully protected areas, preserving important habitats for seabirds, whales and dolphins, endangered marine turtles and thousands of species of fish and other marine life".

The Māori Party, which was a supply and confidence partner of National's at the time, immediately raised concerns about the sanctuary.

Labour's Māori MPs were also dubious about it and what it would mean for iwi with fishing rights agreed in Treaty settlements.

National MP Nick Smith currently has a member's bill in the ballot that would progress the establishment of the sanctuary.