The Waitangi Tribunal says relationships within Ngapuhi have been seriously damaged by the Government's mandating process.
The Tribunal has agreed to hold an urgent hearing into the Crown's approval of the runanga-led group, Tuhoronuku, to settle the iwi's Treaty claims.
Twelve hapu groups, including the major sub-tribe Ngati Hine, are among those boycotting Tuhoronuku and asked the Tribunal for an inquiry.
The Tribunal says it does not accept that the level of dissension in Ngapuhi is the outcome of a fair but hard-fought mandate contest.
It says the Crown must act in a fair and even-handed manner towards Maori, but it has effectively picked a winner by funding Tuhoronuku to the exclusion of alternatives.
The Tribunal says the resulting level of dissension and conflict among Ngapuhi reflects poorly on the Crown's management of the mandate process.
It says the Treaty interest at stake is the right to negotiate and settle Treaty claims, and the claimants had a legitimate expectation of genuine choice over a settlement model.
The Tribunal says the evidence shows the Crown was only prepared to allow one option to be put to Ngapuhi, and government ministers then made unilateral decisions about subsequent changes to the Deed of Mandate.
It says the Crown's usual policy may be to settle with large natural groupings, but given the size and complexity of Ngapuhi it is not clear why it has been unwilling to consider alternative options.
The Tribunal says the dissenting hapu are significant groups within Ngapuhi, representing a large body of opposition to the mandate and are not a 'vocal minority', as Tuhoronuku has claimed.
It has asked lawyers for all parties to discuss possible dates for the urgent hearing, in the next few weeks.