The new mandate model for the Ngāpuhi settlement is a blueprint for war, according to Ngāti Hine chair Waihoroi Shortland.
The representation plan drawn up by a Ngāpuhi working group, Crown officials and Treaty Negotiations Minister Andrew Little will be put to a vote next month.
Under the revised model, elected hapū representatives would have a strong majority of seats on a new trust, to negotiate the iwi's commercial settlement.
The trust, dubbed MaNA (Mandated Ngāpuhi Authority) would then work with six regional hapū groups (Rohe Negotiation Boards) to decide how to split the money.
The Crown could not have found a more divisive model if it tried, Mr Shortland said.
"And it's quite happy, knowing the depth of feeling in [Te] Tai Tokerau and knowing if you set the taiwhenua (districts) and the hapū up in this way, you could be setting up a recipe for an ongoing war," he said.
Ngāti Hine's seven hapū and a number of others in Ngāpuhi want to negotiate separate settlements, in smaller natural groupings.
The Waitangi Tribunal found that should have been available from the outset.
Instead, the government accepted the mandate known as Tuhoronuku, initiated by Ngāpuhi rūnanga chair Sonny (Raniera) Tau, and had failed to protect hapū rangatiratanga (chieftainship), the tribunal said.
The new proposal was presented to Ngāpuhi last week by the minister's working group.
But Mr Shortland said the plan went nowhere close to delivering hapū rangatiratanga.
"Ngāti Hine has always looked for a reason to stay and we have been unable to find it in this (plan)."
The iwi would mobilise its hapū and people to vote no to the final proposal, he said.
"Furthermore Ngāti Hine signals to the Crown that we are exercising our withdrawal from the final settlement proposal regardless of the outcome of the vote," Mr Shortland said.
Seventy-five percent of Ngāpuhi and 65 percent of its 100-plus hapū would need to support the plan for negotiations to begin.
The Crown has warned it will not be able to negotiate with any hapū who withdraw from the Ngāpuhi mandate until at least 2020, by which time it hopes to have the iwi's settlement legislation before Parliament.