Labour's environment spokesman David Parker said Treaty Negotiations Minister Chris Finlayson was deliberately stoking tensions over the Treaty by making such a claim.
Mr Parker said existing Treaty settlements included clauses which explicitly stated that any claims for freshwater were unresolved.
"The current Ngati Tuwharetoa settlement currently before Parliament ... expressly states [that it] does not affect any rights of iwi and hapu in relation to water," he said."Mr Finlayson also knows the settlements with other iwi - including Ngai Tahu and Tainui - are the same. Each includes a similar clause."
Mr Finlayson told the Herald yesterday that Labour's proposal to put a royalty on commercial water use could force full-and-final Treaty settlements to be opened for renegotiation with iwi.
The policy overturned accepted policy of successive Governments of the past 25 years that no one owned the water, he said.
Applying a royalty would "open a Pandora's box" because it was an assertion of Crown ownership.
Mr Parker said Finlayson's claims were false, and accused him of using his ministerial role for political purposes.
"He is wrong, as Sir Edward Durie - head of the Maori Council, and whose former roles include High Court judge and Chair of the Waitangi Tribunal - has said."
He added: "It is sad that, after many years' good service as Minister of Treaty Negotiations, Mr Finlayson has chosen to act this way for political convenience."
If elected, Labour plans to hold a Round table meeting within 100 days to discuss water pricing.
It will also hold pan-iwi talks on water, similar to previous discussions on fishing, forestry and aquaculture.
The Government has asked officials to look at possible options for charging for water, but has said that a price on water is unlikely.
Prime Minister Bill English told NewstalkZB this morning that water trading was a possible solution - in which users buy permits to use water and can buy and sell them on a regulated market.
