Community groups working to protect a coastal reserve in Opua are angry that the Far North District Council has given a boatyard owner the right to use it for business.
The council yesterday voted to allow Doug Schmuck, of Doug's Boatyard, to work on boats on a slipway in the Walls Bay Esplanade Reserve.
But opponents said the council did not have the power to do that.
Mike Rashbrooke, a neighbour of the boatyard, said the Reserves Act did not permit the commercial use of public land.
He said the Department Of Conservation recently delegated some of its powers under the Reserves Act to councils - including the granting of easements over reserves.
But he said that did not mean councils could grant easements that the Reserves Act itself did not allow, and that a High Court challenge was likely.
Far North mayor John Carter has defended the council's stance, saying Mr Schmuck provided a valuable service and would use only a small section of the reserve to work on boats.
Mr Carter has supported the boatyard owner in the past, as an MP, when he backed an unsuccessful attempt to legalise Mr Schmuck's activities through a parliamentary bill.