The new CEO of the Northern Land Council Marion Scrymgour has urged the Northern Territory Government to come back and negotiate with Canberra after talks over $1.1 billion in remote housing funding broke down.

Territory Chief Minister Michael Gunner wrote to Prime Minister Scott Morrison last week telling him he would hand back all indigenous housing leases in 44 remote communities, more than half of its overcrowded 73 settlements.

The move followed a bitter public clash between Mr Gunner and Indigenous Affairs Minister Nigel Scullion over a deal made last year to jointly fund the housing program with $1.1 billion over five years.

The NT Labor Government has accused the Federal Coalition of not delivering any money.

Senator Scullion is insisting that the NT’s four Aboriginal land councils oversee housing procurement and accused the Territory Government of not allocating any funding in its budget.

Ms Scrymgour said she wanted to see the NT government back at the table with the Commonwealth Government.

“That is in the interests of Aboriginal people living in remote communities, particularly to deliver good housing and needs on the ground in remote communities,” she told reporters.

“It doesn’t need either government standing away from Aboriginal people.”

The Federal Government is arguing that housing is a constitutional responsibility of the states and territories, which the PM said in a letter to the Mr Gunner.

Ms Scrymgour, a former Labor MLA, is the first woman appointed to run any of the NT’s four land councils, which play powerful roles in Aboriginal self-governance including on land rights and other issues.

She is the fourth chief executive in five months after a tumultuous period in which long-time boss Joe Morrison resigned after a falling out with the executive over alleged poor governance, conflicts of interest and improper spending of taxpayer funds.

The NLC’s finances will be examined in an independent audit, which it agreed to after two days of tense meetings two weeks ago.

“Hopefully we can go forward now and there can be some stability, it is in the Aboriginal Territorians that we do that,” Ms Scrymgour.

“Aboriginal people that live in the Northern Land Council region need this organisation to be functioning and to be focusing on their needs rather than inward focused.”

Ms Scrymgour is the current CEO of the Tiwi Islands Regional Council and will finish up there soon before taking over from NLC interim CEO and her former NT Labor Government colleague Jak Ah Kit.

In 2000, she became the first Aboriginal woman to be elected to the Legislative Assembly, serving as senior cabinet minister and deputy chief minister.

Senator Scullion said he had the “greatest confidence in her capacity to serve the NLC and its members and communities”.