West Australian premier Colin Barnett says up to 150 Indigenous communities are unviable and will almost certainly be closed.
He says his state government cannot afford to keep them running after the federal government handed the state full responsibility for their costs.
On the steps of Western Australia's Parliament House, a handful of protesters gather in opposition to proposed plans to close Indigenous communities.
Indigenous man Herbert Bropho believes it is part of a mining conspiracy.
"They have stopped helping the people in the community. They are not going to help them to fix the windows, to fix their toilets, to fix whatever's on the community. What they are doing is that they are letting them wander off into cities today. Why? When they go off wandering, they will come in and demolish the communities for what's in the ground."
But Premier Colin Barnett says his Liberal state government cannot afford to keep the communities running after its federal counterpart handed over full responsibility for the costs.
Speaking at a child-safety event, he told the child-protection officers gathered -- many of whom deal with remote Indigenous communities -- the state government has no choice.
"That's going to cause distress and hardship and all sorts of problems -- and, no doubt, problems that we aren't really aware of -- in those communities. How we're going to manage that as a government, I'm not yet sure, but it is inevitable. Then there will be another set of issues as people from remote locations move into towns and regional centres, and that will create another set of social problems. I wish we didn't have to deal with that, but it is going to be a reality, and we're putting a lot of time at a government level into how we will manage that change."
Government figures show about 12,000 Indigenous people live in more than 270 communities.
And in 115 of those communities, there is an average of just four people.
But Amnesty International's Tammy Solonec says all levels of government must keep Indigenous people on their lands.
"Forcibly evicting people from their homes and denying them the right to practise their culture is a breach of the International Convenant on Economic, Social and Cultural Rights and the Declaration of the Rights of Indigenous Peoples."
Former federal Liberal Aboriginal Affairs minister Fred Chaney has written to Premier Barnett, urging caution over the decision.
"I've got a lot of confidence in the Premier. I think his heart is in the right place on these matters. But government is very large, he's got a lot of things to worry about, and I just don't want him to lose sight of this issue and what's going to happen to these people if some of these settlements are closed."
