The Auckland War Memorial Museum has conceded that the dispute with Sir Edmund Hillary's family has damaged its reputation.
The museum board also says it is to blame for the long-running impasse, not the museum director.
Prime Minister John Key has helped prevent court action by brokering an agreement over the family's access to belongings bequeathed to the museum in Sir Edmund's will.
The chair of the museum's Trust Board, William Randall, told Morning Report on Tuesday he agreed the dispute has marred the museum's reputation.
He says, unfortunately, the quarrel escalated and that the legal row was a last resort.
Dr Randall says there was always going to be a legal row of sorts because the dispute was over a legal document being changed and the board felt it was important to get clarity on the issue.
Some of the blame for the dispute has been levelled at its director Vanda Vitali but Dr Randall says she only acted on its instructions.
He says Ms Vitali is currently overseas and will return to work in due course.
The Auckland War Memorial Museum board is elected by the region's territorial authorities, the Auckland Museum Institute and local iwi.
The dispute arose over the interpretation of a clause in Sir Edmund's will. His children were on the verge of going to court over access to thousands of his papers, maps, photos and diaries that were bequeathed to the museum.
The museum's former director Rodney Wilson says the museum's reputation has been damaged.
He says museums must be sensitive when dealing with families and he believes the dispute should never have happened.
John Key offered to intervene in May to help resolve the dispute and on Monday announced an agreement signed at the weekend sets out principles and protocols for how the museum will manage requests for access.
Mr Key said he intervened because of Sir Edmund's public standing and it would have been inappropriate to resolve the matter through the courts.
Sir Edmund's son Peter Hillary said it was a shame the deal took so long to reach and he felt indebted to Mr Key for helping to end the dispute.
Under the agreement, the museum acknowledges the intent of Sir Edmund, as expressed in his will, that his children have special rights over the material.
It acknowledges that the museum owns the Sir Edmund Hillary Archive and has rights consistent with that ownership
However, it also stipulates that his children will have unlimited access to the archive and the right to decide what material can remain restricted and what can be shown to the public.
The Hillary family is not able to remove the archive from the museum.
Life of adventure
Sir Edmund gained worldwide fame as the first, along with his climbing companion Tenzing Norgay, to conquer Mt Everest in 1953.
The New Zealander died in January 2008 in Auckland, aged 88, after a long illness.
The ascent of Everest was just the beginning of a life of adventure and service for Sir Edmund: searching for the Yeti in the Himalayas, riding jetboats in an expedition to find the source of the Ganges River and making the first overland trip to the South Pole on modified tractors.
However, Sir Edmund's greatest project was his Himalayan Trust, set up in the 1960s.
Sir Edmund felt a deep sense of obligation to the Sherpa people of Nepal, and from 1966 made numerous visits to the Himalayas to build and advise on schools, hospitals, air strips and bridges.