Mana whenua of Ihumātao are disappointed to hear through the grapevine that the Crown is keen to help Auckland Council buy the contested land.
Sources have told RNZ the Crown is considering lending $40m to the council so it can buy the land from Fletcher Residential.
In September, mana whenua groups came together under the mantle of Māori King Tuuheitia and made it clear they wanted the land returned to them.
Kiingitanga spokesperson Rahui Papa said the latest news came as a surprise and was not what they asked for.
"It's speculation for me at the moment until we hear a 'confirmed' one way or another," he said.
"If it rings true, then it is very disappointing that the viewpoint of mana whenua haven't been part and parcel of the discussions, or the solution focus."
Mr Papa said if Auckland Council bought the land then mana whenua could be further alienated from their whenua.
He said he would be annoyed if they were not being kept in the loop.
"Just to be clear, mana whenua through the Kiingitanga expect to be part and parcel of the discussions .. and be part and parcel of any solution that comes up so we can protect the right of mana whenua to the whenua."
Mana whenua and others have remained on site for three years to stop Fletcher Residential from building 480 homes there.
Prime Minister Jacinda Ardern would not say what was on the table to try to break the deadlock yet.
Yesterday, Finance Minister Grant Robertson met with Fletcher staff but said they did not talk about the council idea, claiming that was only speculation.
The thought of the council owning Ihumātao is a hard pill to swallow for mana whenua. It was the council that hurriedly granted the special housing status there in 2014 so the development could go ahead.
The council would not confirm the talks either, however it is possible that if the council bought the land, another deal could be struck with mana whenua.
Karen Wilson, the chair of mana whenua iwi Te Akitai Waiohua, said the council played a part in the situation they were in, and she had her reservations.
"All I can tell you is my gut feel around the reason why these things happened in the first place, which was equal proportions the Crown and equal proportions the council," she said.
'I don't understand what is happening."
Te Akitai are in the final stages of settling their Treaty claims, approaching the signing of their Deed of Settlement.
Ms Wilson said given the direction from mana whenua to the government she expected to be kept in the loop.
"I would have expected we would have had, as with Waikato-Tainui, have a part to play in that decision-making.
"We are seriously displeased about the situation."
Te Kawerau a Maki executive chairperson Te Warena Taua said he was also surprised by the latest.
Mr Taua has been in support of the housing development, having secured a number of homes to be built by Fletcher for mana whenua as part of the deal.
After the protesting there ramped up in July, he united with mana whenua and is part of the consensus that the land be returned to them.
"Any move to further alienate mana whenua from their whenua would be unacceptable," he said.
Those holding the fort at Ihumātao were also surprised by the latest revelations.
SOUL spokesperson Qiane Matata-Sipu said the group did not care what deals were done, so long as the land was returned to mana whenua.
In August, news broke that the Crown would be loaning Waikato-Tainui the money needed to buy back Ihumātao, however Rahui Papa said that was speculation and had not eventuated in talks.
He said he was hopeful that the same thing was happening this time around.