National leader Judith Collins is urging Prime Minister Jacinda Ardern not to open "a Pandora's Box" by buying Fletcher Building out of Ihumātao with taxpayer money.
The Prime Minister would not confirm on Monday if a deal had been struck to resolve the standoff at Ihumātao after RNZ reported that an initial deal was expected to go to Cabinet.
RNZ understands the deal is for Fletcher Building to sell the land to the Government. It would then need to be agreed how the Government and mana whenua - the iwi and hapū who have traditional authority over land - would decide on its future.
"I'm not here to make any announcements relevant to that issue today or to give a timeline," Ardern responded to questions about a potential deal at her post-Cabinet press conference. "Once we have an agreement to be announced we'll announce it."
Ihumātao is an area of historical significance for Māori near Auckland Airport, where activists have been protesting against Fletcher Building's plans to build almost 500 homes on land it purchased, that was confiscated in 1863 by the Crown.
Protesters from the Save Our Unique Landscape (SOUL) movement say the land should be returned to Māori, and occupation of the land ramped up in July 2019 after police served occupiers with an eviction notice.
The Prime Minister negotiated a temporary halt to construction at the site in July 2019 while a solution was sought. But more than a year has passed and nothing has been announced, despite speculation throughout the year that a deal was near.
Collins has often criticised Ardern for getting involved in the first place. In the lead-up to the election, Collins said if she became Prime Minister, Fletcher Building would be allowed to continue with its plans.
"The Ihumātao situation is a problem of Jacinda Ardern's own making, and taxpayers should not be bailing her out," Collins said on Monday.
"It's difficult to fathom that with more than 20,000 Kiwi families currently waiting for a home the Government is prepared to spend millions stopping 480 much-needed houses from being built.
"The Prime Minister needs to explain why she thinks it's appropriate to meddle in private property rights with taxpayers' money, because she will be setting an appalling precedent."
ACT leader David Seymour said the deal would be Ardern's "worst decision" as Prime Minister.
"If you own land and someone squats on it, the Prime Minister won't defend your property rights, she'll use taxpayers' money to buy the land off you," Seymour said.
"What a terrible signal this sends agitators who decide to disregard the legally binding treaty settlement process. The Prime Minister's job is to uphold the law and none more so than private property rights."
Attempts by Labour to settle the dispute were repeatedly blocked by its former coalition partner NZ First, which was voted out of Parliament at the election.
NZ First leader Winston Peters told supporters in the lead-up to the election that Labour asked his party to use its 'agree to disagree' clause in their coalition agreement over Ihumātao but the request was refused three times.
"We said no to Labour. Not once. Not twice. But three times. We went to the wall over Ihumātao. Labour asked us to 'agree to disagree'. We said no. It was just too important for the country's future. For us it was a matter of deep principle."
Ardern shot down speculation in June that a decision about the future of the south Auckland land was near and that the Government was planning to acquire it under the Housing Act, avoiding any conflicts with Treaty of Waitangi settlements.
Māori King Kiingi Tūheitia announced on behalf of mana whenua in September last year that they had reached consensus over what to do with Ihumātao, and their position was they wanted it back.
Ardern said on Monday she has relied "heavily" on the Māori King for advice on how to settle the land Ihumātao.
"I have taken the advice of the king around when it would be most appropriate in terms of a visit and I'll continue to do that so I have no set date. My focus actually rather than a visit has been resolution and I do think that's been the priority."
Collins fears that an Ihumātao deal will place a question mark over all full and final treaty settlements, and the protestors opposing a development at Wellington's Shelly Bay will think they can sit tight and wait for the Government to step in.
"We have been very specific that one of the criteria for any resolution at Ihumātao has to be that it doesn't undermine the treaty process and that's been one of the fundamentals for us as the Crown," Ardern said.
"We just can't do that - it would be an act of bad faith for all other iwi and treaty partners."
Collins said Ardern had no right to get involved in the first place other than to tell protestors to go home.