WASHINGTON — Hawai'i Gov. Linda Lingle said yesterday the state should not abandon its legal challenge over ceded lands, despite protests by the Office of Hawaiian Affairs that pursuing the case could have grave consequences for Hawaiians-only policies.

The state Supreme Court will hear oral arguments on Wednesday in the case that pits the Lingle administration against the Office of Hawaiian Affairs, a state agency. At issue is whether Hawai'i should be allowed to sell any of its 1.2 million acres of ceded lands.

The court ruled last year that the state could not sell ceded lands until Native Hawaiian claims to those lands are resolved. The state is appealing that decision.

Lingle said the concerns of Hawaiian groups have been raised before. "But it wasn't reason enough for us to be able to say to people in the state that these (lands) are not really our lands," Lingle said.

The ceded lands once were under control of the Hawaiian monarchy, which was overthrown in 1893.

Lingle said that if the state drops the case, it would have to concede it doesn't have clear title to the lands, which the United States transferred to it at statehood.

"We couldn't do that, even though there is a minute — and I do think it's minute — possibility that there would be some expansion of the issue," Lingle said. "We do believe the lands came over properly at statehood."

OHA Chairwoman Haunani Apoliona said Friday the state appeal could undermine Native Hawaiian programs and the legal basis for Native Hawaiian federal recognition.

A far-reaching decision by the U.S. Supreme Court could affect OHA's ability to carry out its mission of bettering the conditions of Native Hawaiians," she said.

Lingle said yesterday the state has "done everything in our power to narrow the issue before the court."

"We told (the court) we aren't asking any other questions," the governor said. "We also made the point in our brief that we are simply addressing the legal issue, not the moral or political issue as it relates to whether the Native Hawaiians were treated fairly or whether they should be compensated."

Lingle also said it's possible anti-Native Hawaiian groups would have sued the state had it not appealed.

"That would have opened up this whole issue in a very big way," Lingle said. "I think that by us doing the case ourselves and narrowing it, we have actually reduced the possibility that this would go on to other issues."

Lingle said a bill in the Legislature would require legislative approval for selling or transferring the ceded lands.

"Once I see the bill, there is a possibility that I might actually sign that bill because when they pass something like that, what they are saying is these are our lands," Lingle said. "You can't pass a law that restricts it if it didn't belong to you in the first place."