Tuhoe rejected numerous alternatives to ownership of the Urewera National Park during settlement negotiations and in the end the Crown was left with no other options on the table, Prime Minister John Key says.
The iwi and the Maori Party were outraged when Mr Key announced last week the park would not be handed over, and he has been accused of pulling out of the deal at the last moment.
But he said yesterday that wasn't the case and Tuhoe had never been told that an agreement in principle was acceptable to the Government.
"There were genuine attempts by the Crown to put up all sorts of alternatives," he said at his post-cabinet press conference.
"As those alternatives were rejected by Tuhoe, it left the negotiating team in a position where there was only one option.
So they had to come to Cabinet and say 'do you want to take it?'...that never meant it was acceptable to the Crown."
It did not go to Cabinet because Mr Key decided, after discussing it with some of his ministers, that it wasn't acceptable.
He said a crucial factor in that decision was the precedent that would be set by giving Tuhoe ownership of the park.
"There are three or four other iwi in similar positions, who I believe would have expected the same outcome in their settlement negotiations," he said.
Tuhoe seemed to be so sure the deal was about to be sealed that a hui was arranged for a signing ceremony, but Mr Key said no promises were ever made.
Chief Tuhoe negotiator Tamati Kruger told NZPA last week the tribe was confident of securing the park until Mr Key intervened, Mr Key said today that was what Tuhoe had hoped for, rather than what Crown negotiators had agreed to.
"From the Government's perspective, we're still hopeful that a deal can be concluded," he said.
"We've spelt out our bottom line and that is that full vesting of Urewera National Park in Tuhoe is not on the table.
"That doesn't mean there aren't other creative ways through this and I'm hopeful we can find one of those."
Her said it was up to Tuhoe and the Crown negotiators to re-engage when they thought the time was right.
Mr Key said the Government's relationship with the Maori Party was "in good shape" despite the uproar over the Tuhoe decision.
He thought the goal of settling all historical treaty claims by 2014 was achievable, although he admitted it was an ambitious deadline.
"I'm hopeful all the settlements can be achieved but I'm not prepared to do deals at any cost," he said.