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Asset sale battle heads to court

The Maori challenge to the government's plans to sell nearly half of Mighty River Power will go before a High Court judge on Monday.

The Maori Council will argue the government will be acting illegally if it partially privatises the hydro company before Maori water rights are settled.

Two Waikato hapu affected by the potential sale - the Waikato Rivers and Dams Claim Trust and the Pouakani Claims Trust - are also part of the hearing, which is set down for at least three days before Justice Jillian Mallon in the High Court at Wellington.

The government believes power companies will perform better if they are 49 per cent owned privately. It had originally hoped the sale process would start in September.

Last month, Mr Key said the partial privatisation of Mighty River Power was "completely on track" despite the Maori Council's legal bid to block it.

"Between March and June next year we intend to offer shares in Mighty River Power," he told parliament.

But on Sunday, he told TVNZ the delay in asset sales had been one of the low points of the year.

"I think we'd like to get there," he said.

Labour doesn't believe the government can meet its share sale deadline as the issue may go all the way to the Supreme Court.

The government intends selling 49 per cent of Mighty River Power and then 49 per cent each of Meridian, Genesis Energy and coal miner Solid Energy.

But the Waitangi Tribunal, in an interim report, wants the government to halt privatisation while it changes the electricity company constitutions to allow Maori input into how they are run.

The tribunal says Maori do not "own water" but can claim "residual property rights" which must be properly acknowledged for the government to meet its obligations under the Treaty of Waitangi.