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He later told Tautoko FM in Te Reo that he was making a statement about the environment.
Mr Key, whose speech was drowned out by the throngs singing outside Te tiriti o Waitangiwhare, told the gathering that Maori were better off under a National government.
He said Maori had gained in education and employment since National had been in power.
Mr Key said oil exploration was for the benefit of New Zealand and despite concerns from protesters opposed to deep sea mining, he said there was nothing to fear.
"Do you seriously think as Prime Minister I'm going to oversee some kind of economic carnage of our country?"
He left the whare again flanked by Titewhai Harawira and her daughter Hinewhare, who he could be seen laughing with.
Mr Key was supposed to have been welcomed on to Te Tii marae at 10am but was delayed more than 90 minutes by a group calling for his sacking.
The diverse group of Maori, Pakeha, Pacific Islanders and members of the Mana and Greens parties converged on Te Tii Marae at Waitangi to protest against deep-sea drilling in the Far North and to raise other environmental concerns.
The group, who began their hikoi at Cape Reinga, were largely peaceful and good-natured but some members began shouting at Mr Key's sizeable entourage that included a number of National MPs.
Mr Key was again brought on to the marae by a frail looking Titewhai Harawira and her daughter, Hinewhare, who was yesterday ejected from the marae during a visit by Governor-General Lieutenant General Sir Jerry Mateparae.
Government ministers including Economic Development Minister Steven Joyce were forced to wait outside the marae shoulder to shoulder with the protesters but with little apparent ill-feeling until the hikoi was taken on to the marae by Titewhai Harawira.
The fireworks promised by protesters opposed to deep sea mining have been surprisingly absent from the powhiri with many holding signs that are more environmentally focused rather than demanding the crown honours the Treaty.
The marae, which is packed with media, has been calm this morning with good-natured speeches.
Labour leader David Cunliffe, who recently spoke of improved relations between his party and Maori, is due to go on to the marae after Mr Key.
Locals from Te Tii marae said the occasion had been "fairly low key and tame'' compared with previous celebrations.
Among the first politicians to arrive at Te Tii Marae this morning was Green Party co-leader Metiria Turei.
Mrs Turei was with the hikoi of about 70 protesters opposed to deep sea oil drilling and mining.
"We support the kaupapa of the hikoi. This is about protecting our oceans. John Key is not listening to the community about this and the community is bringing it to him. That's the right thing to do,'' she said.
Hikoi organiser Reuben Porter said the powhiri for Mr Key and his entourage of national MPs had breached tikanga by not being held outside where the public could address their concerns.
"This is for Maori and Pakeha as well,'' he said.
- James Ihaka of the New Zealand Herald