Indigenous leaders reeling after assembly rejected

Cape York leader Noel Pearson has described Malcolm Turnbull's decision on the Uluru statement as an "egregious" dog whistle.

The federal government has rejected a proposed elected parliamentary indigenous advisory body. (AAP)

Indigenous leaders are reeling after the Turnbull government rejected a proposal for a constitutionally-enshrined indigenous voice in parliament.

Prime Minister Malcolm Turnbull insists a new representative body was not desirable or capable of winning acceptance at a referendum.

During a summit at Uluru in May, indigenous leaders rejected symbolic constitutional recognition in favour of an elected parliamentary advisory body and a treaty.

Josephine Crawshaw, who is involved in the Uluru statement group, said there was a sense of "groundhog day" for indigenous people.

"After a decade of discussions and millions of dollars spent on constitutional recognition it is unfortunate we have come to this," she said.

"We have come to a point where seemingly no action will be taken."

Mr Turnbull insisted the government had listened carefully to the arguments put for a new body and recognised the desire for indigenous Australians to have a greater say in their own affairs.

Opposition Leader Bill Shorten and indigenous Senator Pat Dodson on Thursday said Mr Turnbull had thrown away years of hard work and goodwill by ignoring the legitimate aspirations of the Aboriginal community.

Greens Senator Rachel Siewert said cabinet's decision makes a "mockery" of the government's claim that they listen to indigenous people.

The National Congress of Australia's First Peoples said the decision was sending "shockwaves" through indigenous communities.