In Foreign Parts: Maori militancy fades as rainbow nation embraces diversity

British and Maori flags flutter from a tall white pole that marks the place where the foundations of modern New Zealand were laid. In this tranquil spot, overlooking the Bay of Islands, the Treaty of Waitangi was signed in 1840 by Queen Victoria's representatives and 50 tribal chiefs who arrived by canoe.

Waitangi, on the east coast of the North Island, is now a tour bus destination, with Treaty House and its spacious grounds preserved as an historical site. But the treaty, under which Maoris ceded sovereignty to the British Crown in exchange for recognition of their ownership of the land, continues to shape race relations in New Zealand.

In contrast with Australia, where Aborigines were dismissed as savages by European settlers, the rights of Maoris were acknowledged from the start. The experience of the two indigenous peoples in early colonial times is the root of the strikingly different situations in which they find themselves today. Travelling across the Tasman Sea, the gulf never fails to amaze. Aborigines – apart from a few talented individuals – hover on the margins of Australian society. One rarely sees a black face in Sydney, Melbourne or Adelaide. Aboriginal people living in isolated towns and Outback areas are visibly downtrodden and depressed.

In New Zealand, Maori people are everywhere: presenting the news on television, making speeches at political rallies, hurrying through Auckland city centre in business suits. Self-confident and accomplished, they are integrated into every aspect of mainstream society.

New Zealand is truly a bicultural nation, and the sense of two races living side by side is reflected in the structures and institutions. The country is officially bilingual, with every street sign and passport printed in English and Maori. Each government department has a Maori name, and telephone calls are often answered with "Kia Ora" instead of "Hello".

Maori culture permeates public life, with official ceremonies invariably featuring a powhiri, or Maori welcome. Regional councils are obliged by law to consult local iwi (tribes) and seven seats in parliament are reserved for Maori MPs, who frequently hold the balance of power. In Australia, only two Aboriginal senators have ever sat in the federal parliament. There has been a Maori Governor General, a Maori Deputy Prime Minister and a Maori defence chief.

The Treaty of Waitangi was flouted for decades, leading to land wars and the forcible confiscation of Maori property. But it is still cited as the main reason that, exceptionally for a colonised people, Maoris were never subjugated.

There were other factors too. Aboriginal tribes were nomadic and dispersed across the vast continent; New Zealand was a small country where the indigenous population could not be ignored. Maoris, unlike Aborigines, were a warrior race. "We were not going to lie down and be walked over," says Dr Monty Souter, senior lecturer in Maori studies at Massey University.

In the "hierarchy of race" operated by Europeans, brown-skinned Maoris were middle-ranking while black-skinned Aborigines were at the bottom of the heap.

In New Zealand, militant protests by Maoris led to the establishment in 1975 of the Waitangi tribunal to hear compensation claims for losses going back to colonial times. There have been several multi-million-dollar settlements and, while the tribunal has been criticised for accumulating a huge backlog of claims, it is seen as an important part of the healing process.

Helen Clark, the Prime Minister, says: "The treaty has enabled us to build processes for moving on. We have institutionalised ways of working that are aimed at reconciliation."

Relations between Maoris and pakehas – white people – are not without problems, and Maoris remain the most disadvantaged socio-economic group. Waitangi Day, New Zealand's national day, has been marred by repeated protests. One year, demonstrators spat at dignitaries, trampled the New Zealand flag and tried to burn down Treaty House. But the sense of apartheid that blights life in Australia is absent. Intermarriage is common, and Maoris make up 15 per cent of the population (Aborigines represent less than 2 per cent).

Most crucially, perhaps, pakehas are proud of their Maori inheritance and there is an enormous amount of goodwill between the races. The words uttered by Captain William Hobson when he signed the treaty on behalf of the Crown – "He iwi tahi tatou", meaning "we are now one people" – still resonate 162 years later.