Prime Minister John Key this morning confirmed Cabinet would make a decision today.
Mr Key's stated preference has been that Maori issues would be best dealt with by an advisory board to the council, rather than separate seats.
But Maori Affairs Minister Pita Sharples and Local Government Minister and ACT Leader Rodney Hide would both present arguments to Cabinet.
A decision to rule out Maori seats would mean Mr Hide would not have to fulfil a promise made last week to resign over the issue.
Maori have strongly opposed the dumping of the Maori seats, which went against a Royal Commission recommendation.
"I've got a strong view of where we should go now," Mr Key said. "We'll sit down in Cabinet and have that discussion."
Mr Key was unruffled by Mr Hide's ultimatum, which followed the prime minister sounding him out about the possibility of a changed position on the seats.
"I guess it's a matter of principle for him...I haven't lost respect for him for it. I mean I don't think ministers would want to do that every five minutes but this is something he cares a lot about."
An email written by National MP Tau Henare added fuel to the dispute last week when it was leaked to media. It said Mr Hide had been threatening the stability of the Government when it enjoyed only 1 percent support in the polls.
In the email, Mr Henare urged National MPs to back Maori seats, a reversal of its previous policy, saying there was public support for them.
Mr Hide had assured Mr Key that ACT would not threaten the stability of the Government and the confidence and supply agreement would remain in place.
Mr Key today said when such thoughts were put in writing they almost always made it into the public arena.
Asked if Mr Henare should have resisted writing the email Mr Key said: "That's for him to reflect on". He would not be raising it with Mr Henare.
