Maori Party MP Hone Harawira said placing the foreshore and seabed into public domain was a "wishy washy" solution that will not be readily accepted by Cabinet.
The previous government enacted the Foreshore and Seabed Act following a 2003 Court of Appeal ruling in the Ngati Apa case that raised the possibility, in some narrow instances, for Maori customary title to convert into freehold title.
That had the potential to put parts of the coastline under Maori control, and Labour legislated against it.
National, supported by the Maori Party, plans to repeal the Act.
Attorney-General and Minister for Treaty Negotiations Chris Finlayson said the Government's proposal was to place the foreshore into the public domain and give Maori some ability to test, through the courts, their claims to customary title over coastal areas.
Today, Mr Harawira said public domain did not work for anyone involved.
"It's really just the option that the Crown thinks it might be acceptable ... well I know it's not where Maori want to be.
"I think it's kinda wishy washy for the rest of the country too," he told TVNZ's Q+A.
Mr Finlayson was "gonna have trouble there" trying to sell public domain to his fellow Cabinet ministers, Mr Harawira said.
There was still room for the Maori Party to negotiate a different outcome, he said.
One option was to return to the previous status quo where Maori could contest ownership through the courts.
"The whole world knows we were here first, how come we have to go to court? It's kinda silly isn't it?"
Maori were happy with the repeal but wanted the title to move towards tupuna (ancestral) title rather than public domain, Mr Harawira said.
Seventy percent of New Zealand's foreshore and seabed was already owned by private landowners, many foreign, he said.
Maori did not want to stop other New Zealanders from accessing the beach.
"It (the foreshore and seabed) was always Maori, why shouldn't it be Maori today? Have you ever heard a sense that we want it back for you couldn't come to the beach?"
Prime Minister John Key has said previously the amount of foreshore and seabed Maori will be able to secure customary title for would be "reasonably small".
Labour argued the original Act guaranteed Maori customary rights.