The Northern Territory’s four powerful indigenous land councils have sided with the Commonwealth over the NT Government in a fight over $1.1 billion for remote housing.

Indigenous Affairs Minister, Senator Nigel Scullion, is withholding the rollout of $550 million for ­indigenous housing amid a breakdown in negotiations with the NT Government about how to spend it.

He said last week he was considering other options including dealing directly with land councils – which are statutory authorities that enforce land rights – and giving them control over funds to provide housing.

It is unclear how the NT Government could separately allocate its half of the $1.1 billion committed to remote housing over a decade.

The NT Government is under pressure after its Housing Department was found last week to have breached its tenancy agreement.

Aboriginal residents from the remote Santa Teresa community won compensation after suing over the squalid state of their houses.

Lawyers and litigation funders have offered to represent any of the Territory’s other 70 remote indigenous communities who also want compensation for poor public housing they are renting.

Senator Scullion says he is withholding the money because the NT Government refuses to involve the land councils when it should be a priority that “indigenous employment and business outcomes be maximised”.