The Maori Council has filed court papers to challenge the Government's planned partial sale of hydro power generators.
The Council says it has been left with no option but to take legal action to halt the sales.
Lawyer Donna Hall said the papers will ask the High Court to review the sale process and ask for an injunction halting the sale until the review is finished.
The Government says it wants to go ahead with the sale of shares in Mighty River Power.
Earlier, Ms Hall told Morning Report that iwi represented by the Maori Council are united in their view that the Government's action is illegal.
The Maori Council spent Thursday visiting claimants along the Waikato River to seek feedback on what its next move should be - and also secured some funding for the challenge.
Ms Hall says the legal team has enough money to start the proceedings, and is confident that tribes the council will represent can provide funding to continue the legal fight.
The Government aims to partially privatise Mighty River Power between March and June next year, though the Waitangi Tribunal has recommended that Maori rights to waterways are resolved before the partial sales begin.
Shares are also due to be offered in Genesis Energy, Meridian Energy and Solid Energy.
Hapu support legal action
At least two hapu who have taken grievances over waterways to the Waitangi Tribunal say they fully support the council's decision to take the water rights matter to the High Court.
A spokesperson for Rotorua hapu Te Maru o Ngati Rangiwewehi says it will be extremely difficult paying for the court action, but the hapu will find the money.
Whatitiri Maori Trustees spokesperson Meryl Carter says the claims were lodged jointly with the Maori Council and the hapu have always known the case might end up in court.
She says it is disappointing the Government has refused to deal with the council and discuss possible solutions.