Prime Minister Julia Gillard has announced three trial sites for the National Disability Insurance Scheme but she has not convinced three key states to get on board.

The negotiations have split along partisan lines, with Labor governments in South Australia, the ACT and Tasmania agreeing to host trial sites for the scheme.

But the conservative states - New South Wales, Victoria, Western Australia and Queensland - have not signed up.

WA Premier Colin Barnett described the outcome as an "opportunity squandered".

Ms Gillard said she was disappointed the conservative states did not offer extra money to hold the trials.

She said NSW and Victoria only had to offer modest amounts of extra money to get a site ($70 million and $30 million respectively).

"I want to see the national roll out, but when we do that we know we will be doing it right because we have this experience in these launch sites," Ms Gillard said.

"At the moment your chance of getting assistance if you have a disability depends on how you got that disability and it depends on where you live.

Commonwealth funding includes: $342m over three years for individually funded packages for people with significant and permanent disability;

$342m over three years for individually funded packages for people with significant and permanent disability; $154m over three years to employ local area coordinators;

$154m over three years to employ local area coordinators; $58m over three years to assess the needs of people with a disability in launch locations; and

$58m over three years to assess the needs of people with a disability in launch locations; and $240m over four years to build and operate an NDIS IT system

"I am disappointed that we haven't been able to reach agreement over what are comparatively, for governments in this country, relatively small sums against a Federal Government contribution of $1 billion - $300 million into NSW and $100 million into Victoria."

NSW and Victoria had put in a comprehensive joint bid for sites which would have served 15,000 people.

But the stoush over funding couldn't be resolved.

NSW Premier Barry O'Farrell says his state has $570 million for the trial and the Federal Government did not put any additional money on the table on Wednesday on top of its $1 billion.

"What frustrates me is that of $1 billion, only $350 million goes to actually providing services to people with disabilities, the rest is admin and set-up costs," he said.

Ms Gillard responded by saying "the rest is the necessary arrangements to set up the scheme, but nothing gets us away from the maths here".

Mr O'Farrell says he still believes the Commonwealth should fund the whole scheme.

"There was no way today I was going to short-change people with disabilities," he said.

The Prime Minister says sites can still be agreed on in the two biggest states outside of COAG meetings.

Victorian Premier Ted Baillieu says his state's commitment to the NDIS remains undiminished.

"We owe it to the disability sector to get this right and that's what we intend to do," he said.

"We've said to the Prime Minister that we've made our ministers available to continue these discussions tomorrow.

"We want to reach a resolution on this but we have to make a fair assessment."

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Squandered

Ms Gillard says the Commonwealth will continue to work with Western Australia on its version of the NDIS, called My Way.

But Mr Barnett was scathing about the outcome of Wednesday's meeting.

"Without exception, premiers and chief ministers arrived at COAG with a great deal of goodwill for an NDIS, because it is the right thing to do," he said.

"However today, in my judgment, was an opportunity squandered.

"We did not make the most of what could have been achieved today, and with due respect to the three trials that have been set up, they are small-scale, they are in the small states, and we should have seen at least one or two trials in the larger states."

Queensland's Campbell Newman has been the premier most vocal about the NDIS funding arrangements.

He says he refused to commit any funds because his state has a $4 billion deficit.

"Queensland is putting in excess of $900 million a year into the support of people with disabilities right now," he said.

"Should we put more in? You betcha. Do we want to put more in? You betcha. Can we put more in right now? No, I'm afraid we can't, and why can't we, well go and ask Anna Bligh and Andrew Fraser."

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GST row

Meanwhile, the row over the way GST funds are distributed has flared between the leaders.

Mr Barnett wants a new formula for handing out the GST money.

He says Victoria, New South Wales and Queensland agree with him.

"That the majority of the GST should be allocated on a simple population basis and then the remainder redistributed to some extent to help the smaller or weaker states," he said.

Northern Territory Chief Minister Paul Henderson is angry.

"I'm disappointed that the gang of four have not come clean with the rest of COAG about this unprincipled attack on the smaller states."

South Australian Premier Jay Weatherill says the wealth of the nation should be shared equitably.

"Not according to some notion of the rich (states) taking the resources and keeping them for themselves."

A review of the GST formula is already underway.