A $600 million dam project faces yet another hurdle as Forest and Bird appeals against a ruling from the High Court.
The Department of Conservation (DoC) has proposed exchanging 22 hectares of protected conservation land from Ruahine Forest Park in Hawke's Bay for 170 hectares of farm land to make way for the proposed Ruataniwha Dam.
The conservation land is home to several threatened species.
Forest and Bird lawyer Sally Gepp said under law DoC does not have the power to swap protected conservation park land.
Justice Palmer said in the High Court decision he agreed with some of Forest and Bird's submissions on the law but ruled the decision came within the broader conservation purpose of the legislation.
Ms Gepp said Forest and Bird has filed an appeal of that decision with the Court of Appeal.
"The judge in the High Court made the point that this case goes to the heart of the purpose of the Conservation Act and that's why it's such an important case for Forest and Bird and for New Zealand.
"We believe the High Court was wrong to hold that the downgrading decision - the decision to revoke the specially protected status of this piece of land - the High Court was wrong to say that was consistent with the purpose of the Conservation Act," she said.
Ms Gepp said if this decision stood it would mean any part of New Zealand's specially protected conservation land could be traded away, and ultimately, as will happen in this case, destroyed for a commercial project.
She said that was regardless of the conservation value of the land in question.
The Hawke's Bay Regional Council's investment company HBRIC hoped to have close of business for the dam by the end of the first quarter, but the new legal action makes that look very unlikely.