Indigenous Affairs Minister Nigel Scullion has been accused of "mucking around" by withholding the rollout of $550 million in federal funds for housing in remote Indigenous communities.
Senator Scullion last week said he was considering other options rather than just handing the money over, because the Northern Territory Government had not kept its promise of last April by matching the $550 million housing spend over a decade in its budget.
The NT Government is dealing with a budget crisis, including record deficit and debt levels and is borrowing to cover daily operations.
The federal government agreed in April to give the Northern Territory $550 million over five years for remote housing, which would be matched by the NT government, but negotiations have broken down.
The NT government's Housing Department was found last week to have breached its tenancy agreement, when Aboriginal residents from the remote Santa Teresa community won compensation after suing over the squalid state of their houses, in which repairs were not dealt with.
However, the issues dated back to previous CLP and Labor governments.
NT Attorney-General, Natasha Fyles, said if Senator Scullion was concerned about how the federal money would be spent he could put parameters in place to ensure it was accounted for.
"We know that in the Northern Territory to overcome, particularly, Indigenous disadvantage we need to address housing," Ms Fyles told reporters.
"When people don't have secure safe housing, it has such a flow-on impact: they can't attend school, they clog up our health system.
"So we need the federal government and we need Senator Scullion to step up, to stop mucking around and to sign off on the remote housing deal so that we can continue the work that we've put in place through Territory government funds to solve these long-term issues."
Ms Fyles was speaking outside John Stokes Square, a Darwin public housing area notorious for anti-social behaviour which will be bulldozed in May to make way for new public housing and a 24-hour police station.
More than 30 residents will be forced out of their homes and into new housing to make way for the development.
Senator Scullion has accused the NT Government of letting Aboriginal communities down by squandering federal money meant for housing and said he was in discussions with Aboriginal land councils about making them responsible instead.
"Do we have another approach, we have the capacity to have a partnership with another group and that is certainly possible, it is a live option," he said.