Asked about the change of wording yesterday Mr Key said the Government was not conceding defeat in its goal of settling all claims by 2017.
"What we are saying is we have to have all participants, and it has to be a full and final settlement. There's no going back. So if the iwi feel they aren't ready to settle, they shouldn't come to the table."
"Having said that, I think they should come to the table. The iwi that have settled have done very well out of it."
Mr Key used his last appearance at the 175th Waitangi Day festivities - the traditional Prime Minister's breakfast speech for a crowd of dignitaries and diplomats - to chart the country's progress since the last big anniversary, the 150th in 1990, and express his hopes for the 200th.
Changes since 1990 included the start of Treaty settlements, the introduction of MMP and the formation of the Maori Party.
There were also small but telling changes, he said. At major events New Zealanders now sang the national anthem in te reo and English - not because they had to, but because "it felt right".
By the 200th anniversary he wanted to see a new flag flying over Waitangi, the settlement of all historic claims, and reform of the Ture Whenua Maori Act.
The Act has vexed lawmakers for the past century and is blamed for making it hard to develop New Zealand's 1.4 million hectares of multiple-owned Maori land. Changing the law was central to Maori economic development, he said.
"If we can make this land work for Maori, then it will add up to $8 billion to the economy and create at least 4000 new jobs over the next decade," he said.
Mr Key said the current flag captured a colonial and post-colonial era whose time has passed.
"It represents the thinking by and about a young country moving from the 1800s to the 1900s. Our role in the world was very different then. Our relationship to the rest of the world has changed."
He acknowledged some people wanted the current flag retained so that would be one of the options in the upcoming referenda.
Some Maori elders are keen to see New Zealand's first flag, the 1834 United Tribes flag, reinstated. Mr Key said the 1834 flag had a special place in history but he believed it was time for something "completely new". His personal preference was a silver fern but not on a plain black background.
More than 30,000 people attended Waitangi Day commemorations in the Bay of Islands yesterday.