Traditional owners whose elders fought off a grandiose scheme for a spaceport pushed by Joh Bjelke-Petersen a generation ago have taken back their north Queensland country.

The battle for Bromley, a seminal event in the land rights movement on Cape York, came full circle with a state government handover on Wednesday.

The Wuthathi, Kuku Yau and Northern Kaanju people regained legal ownership of 160,000 hectares in the cape’s remote north-east, ending 150 years of dispossession of land containing at least 81 sites of cultural significance, from story places to burial grounds.

The owners will devote 51,000ha to national parks and 43,600ha to a nature refuge, with landscape ranging from sand dunes to rainforest a haven for up to 50 rare and threatened species.

It includes Temple Bay, which in 1986 became the proposed site of the Cape York international spaceport, touted as the world’s first commercial space facility.

The $500m spaceport proposal, which Bjelke-Petersen’s government hoped to kickstart with $500,000, would have claimed 200,000ha and permanently extinguished native title on the land.

The Cape York Space Agency, a consortium of companies including the Commonwealth Bank, Price Waterhouse, TNT, Brambles, Boral and Japan’s Shimuzu Corporation, planned to build a rocket launch pad for up to 20 US satellites a year using Soviet rockets.

The plan, which won bipartisan support in federal government, would also have built a new town, sea and airports, and resorts.

One brochure calling for investors promised “major economic benefits” to those who committed early, including through “influencing legislation favourable to commercial operations”.

But the scheme provoked a fierce campaign of resistance from traditional owners led by Wuthathi elder Gordon Pablo and Kuku Yau elder Gerry Pascoe, and in alliance with conservationists.

By the early 1990s, the spaceport plan was on the verge of construction, with surveyors and bulldozers clearing paths through the forest and disturbing at least one sacred site.

Historic brochures promoting a proposed spaceport in Cape York, Queensland. Photograph: ACF

But it was abandoned after 1992 when investor support collapsed after a high court challenge by traditional owners and the federal government imposing higher hurdles on environmental impact and Indigenous consent.

Wuthathi traditional owner Chrissy Warren, who helped negotiate the handover, said the families were “overwhelmed” and it was “amazing that those that stood up to oppose the space station are the ones that put us in this position”.

“That’s why I think it’s really special that country is exactly the way it is now,” she said. “We’ll keep it like that, believe me.”

Another Wuthathi owner, Hilton Noble, who was a teenager in high school when the spaceport idea was floated, recalled elders thinking it was an absurd idea that threatened “the land and our sacred sites in the area, our story places”.

Noble said spaceport would have dealt a crushing blow to their land rights struggle “because it would have been extinguishment of our native title rights – and also the magnitude of the area that would have been excluded from our traditional country”.

Traditional owners were also concerned about the proposal’s impact on the Great Barrier Reef.

Noel Pearson was 25 and finishing law school in Sydney when he joined elders from across the Cape in 1992 to support Pablo, Pascoe and their clans “in their crusade against the space base”.

Pearson said the fight for Bromley and neighbouring Shelburne Bay – Wuthathi land also targeted by the Bjelke-Petersen government for silica mining – was the defining stand in Cape York land rights, “our Wave Hill, our Noonkanbah”.

“We were the last region in the country to join the fight for land rights, barely out of the stifling control of the reserves controlled by the state,” he said.

“It was for Bromley that I first dedicated my life’s work on behalf of these great men and women. Oh how I loved these great elders. To learn at their feet was the greatest privilege of my privileged life.

“Old man Pascoe and his brothers, and old man Pablo, are in my minds eye today. Their memory is as vivid as if they still lived. Bromley was their cause and people from all over Cape York came to stand shoulder to shoulder when they called for help.

“Bromley was the crucible. The Cape York Land Council was born from that fire.”

Andrew Picone, of the Australian Conservation Foundation, which backed the traditional owners in their fight three decades ago, said the new parks would protect the habitat of up to 50 rare or threatened species.

This includes “unique species of ferns, cycads, mangroves and skinks [that] are almost exclusively found on this property”.

“The area is also a remarkable overlap of the Shelburne dune fields and the Iron Range rainforests and is one of the most significant parcels of land in Cape York peninsula,” Picone said.

Warren said traditional owners would explore “economically sustainable” plans and business cases for the land, with a likely early focus on tourism ventures.

There were also among the 600-plus traditional owners “people wanting to get back on country, so we’re trying to get different programs to get our people back home”.

Warren said the landscape was “totally amazing and it’s very remote”, noting some hair-raising off-road driving to survey the landscape during negotiations with state government officials.

“I think it’s going to be a big benefit to us.”

The Bromley handover brings to 3.4 million hectares the amount of land returned by the Queensland government to Cape York traditional owners since 1995, more than 2m hectares of which is now Aboriginal-owned national parks.

The Queensland premier, Annastacia Palaszczuk, said when the Bjelke-Petersen government unveiled its plans in 1986, “they didn’t bother to consult the traditional owners, they just took the land”.

“It was wrong and today my government has returned Bromley to its rightful owners,” she said.