"The policy fails in terms of the norms of domestic and international law that underpin good government in a modern democratic state."
It said the Government had rushed the policy and recommended a return to "the drawing board" with better consultation.
Dr Cullen believes the tribunal's report contains an "implicit rejection of the principle of parliamentary sovereignty".
"The report also seems to be asserting that if Parliament changes the law, as the Government is proposing by removing the capacity of Maori to gain freehold title over the foreshore and seabed, it is somehow breaking the law itself."
But the power of Parliament to change the law was central to the exercise of sovereignty and therefore the exercise of Article One of the treaty.
Dr Cullen also addressed the issue of whether the proposed law removed property rights by saying the legislation would make it clear that the proposals would include the recognition of customary rights as a form of property rights.
Dr Cullen rejected the assertion that the policy had been rushed.
"Dozens of consultation meeting have been held ... on the issue and considerable care has been taken working and reworking the details of the policy.
"It is ironic that the major Opposition parties are attacking the Government for leaning too much towards Maori, while some Maori and the tribunal are saying the exact opposite.
"Perhaps that might suggest to a fair and independent observer that the Government has it about right."
The Treaty Tribes Coalition, a lobby group for iwi including Ngai Tahu, Ngati Kahungunu, Hauraki iwi and Nga Tamanuhiri, urged the Government to seriously consider the report.
It said the Government was planning to breach important constitutional safeguards.
"If the Government gets away with doing it to these litigants, it could do it to any New Zealanders," said chairman Harry Mikaere.
New Zealand First leader Winston Peters said the report "simply adds to the confusion and concern" surrounding the issue.
The tribunal had mixed "mythology, custom, culture and right of use with the concepts of property title, resulting in contradictory quasi-judicial activism".
He said the "gravy train riders would be delighted that the report mentioned the 'C' word - compensation - and no doubt the claims will start coming thick and fast at a cost of millions of dollars to the taxpayers".
Waitangi Tribunal:
Report on the Crown's Foreshore and Seabed Policy
Herald Feature: Maori issues
Related information and links