Maori forest owners fighting to keep exotic trees in the Emissions Trading Scheme (ETS) are cautiously optimistic the Government is backing down.

Two months ago, iwi which rely on the industry were threatening legal action and a Waitangi Tribunal claim over the proposal.

But it appears a compromise might be reached after a series of meetings.

With an estimated $7 billion in future earnings at stake for iwi forestry owners, it looked like the plan to cut pines from the ETS was heading to court.

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The first indication the Government was softening its stance came in a letter to submitters, signed by Climate Change Minister James Shaw and Forestry Minister Stuart Nash. They said it was unlikely exotics would be excluded on January 1, 2023, and they were taking more time to consider other options.

Maori Forestry Association's Chris Karamea Insley said the group met Nash and gave him the hard word.

"Let me be very clear minister, so we accept that your proposal sounds logical and rational but implied in what you're saying there, you have taken that proposal to remove fast-growing exotics off the table, you've walked back on that - and Minister Nash answered yes we have," Karamea Insley said.

The Government should not be legislating away the right of Maori to make their own choices about what they could or could not do on their land, he said.

Stuart Nash said rather than a hard cut-off for pine, he was proposing more of a transition. They would use exotic forests as a sort of nursery, with indigenous plants growing in between the pines until they could be cut away.

The plan would suit the vast majority, Nash said.

"I'm confident that we're not going to close that off to exotics on January 1, what we will do is we're going to keep working on what management plans will look like and at some point in time to be agreed, we will say that all forests within the permanent forests category must abide by these rules," he said.

Nga Pou a Tane, the National Maori Forestry Association chair Te Kapunga Dewes said he was taking heart from the minister's promise, but remained wary.

"I would use words like heartened, I guess another word would be optimistically cautious or cautious optimism going forward.

"It's very clear unfortunately that we don't trust government to deliver on what they've said until they've actually started delivering upon it and put it in writing," Dewes said.

But the feeling is not universal.

Land researcher Manu Caddie from Hikurangi Enterprises did not agree exotics should be in the ETS.

There was little evidence to show the kind of transition proposed would actually work, he said.

"From my understanding and talking to forestry scientists, there's no good science supporting the idea of this sort of magic transition.

"There are some early experiments that are happening now but it's way too soon to confirm that is possible."

Caddie was also concerned that keeping exotics in the Emissions Trading Scheme would cause other problems under Te Tiriti O Waitangi.

"Article two in protecting taonga that are not allowed to regenerate because pine have been incentivised by public policy to take over land that could otherwise have those taonga that are protected and that Maori have the right to protect," he said.

The compromise was unlikely to satisfy the agriculture sector either, which felt too much productive land was being eaten by untended pine plantations, killing communities.

Consultation on the proposal is continuing. - RNZ