Hastings mayor Lawrence Yule said if the bill went through with the clause as written, the Environment Minister could choose whatever they wished in regard to the Hastings' rules.
When asked if he felt the minister would use the clause this way, Mr Yule said Dr Smith had a very firm view such decisions should be made nationally, "and he doesn't want local authorities making them themselves".
"If this law does pass I think there is a high likelihood that he or a subsequent minister would."
In his response to concerns raised about the clause, Dr Smith said the government did not support councils having their own different policies on biotechnology "because it is impractical, cannot be enforced and councils do not have the detailed technical expertise to regulate such a complex area".
The Environmental Protection Authority (EPA) was the agency with the right skills and law to regulate GMOs. As councils did not have any biosecurity controls between districts, there was no way of preventing an organism allowed in one area being spread by wind or people to another.
Dr Smith pointed to the Auckland Council being challenged in court after banning GMOs by Auckland Hospital and University because it could prevent the EPA-approved Pexa-Vec liver cancer vaccine treatment of patients in Auckland.
The Hastings council's ban is on the uncontrolled field release of GMO-based products, not those with medicinal uses.
Anti-GMO lobby group Pure Hawke's Bay had spoken in opposition to the clause at a parliamentary select committee hearing in Auckland in May.
Yesterday member Bruno Chambers said they had hoped it would have been thrown out in its entirety, as the message from the local community should have been "pretty clear to government".
"Maybe [Dr Smith] moves to push it through, but it's clearly against community wishes, and against our council, and the community of Hawke's Bay," he said.
Although it was not "the end of the road just yet", Mr Chambers said they would continue to fight for the policy, and would review their position if the bill passed.
As well as concern for the risk posed to the district's GMO-free status, Ikaroa Rawhiti MP Meka Whaitiri also slammed the Maori Party's support for the "fatally flawed" reforms as a blow to local democracy, which "[fly] in the face of everything the party purports to stand for".
She said she would defend what local government had established around the economic gains of Hastings being "GE free, and proudly so".
As Labour's local government spokesperson Ms Whaitiri said the reforms went "to the heart of changing long term planning in the hands of locally elected officials".
"What this National Government is doing now, they're going to try and run the regions from [Dr Smith's] office," she said,"that's why were standing up and opposing [it]"
The MP could not think of one council which had supported the broad powers of clause 360D. The government was now interfering with the local government act, "and the Maori party is enabling this National-led government to do that".
"I'm calling on the Maori Party to support local democracy, to support local partnerships with iwi and walk away from these disastrous RMA reforms," she said.
"They should be backing local economies and local decision-making instead they're helping enshrine into law draconian ministerial regulatory powers to override local plans, council functions and consents."
Mr Smith said the issue of Government overriding council was not particularly relevant to the RMA bill as it already had the powers to approve a National Environment Standard which would override any council rule.
"The Government is currently doing this under the existing Act with the National Environment Standard on pest control which replaces and overrides all councils' rules on 1080 use. The Government could choose to do the same on the Pexa-Vec vaccine or some other GMO under the existing law."
A spokesperson for Tukituki MP Craig Foss referred comment to Dr Smith.
