The Federal Government has publicly apologised to residents of a Northern Territory Aboriginal community for prolonged delays in delivering new houses promised under its highest profile program for addressing Indigenous disadvantage.

Key points: Federal Government concedes housing delivery has taken too long

Federal Government concedes housing delivery has taken too long Forgotten community makes agreement for new housing lease, with work on new houses slated for October

Forgotten community makes agreement for new housing lease, with work on new houses slated for October NT Government planning to use duplexes to maximise new house numbers

Last month the Commonwealth announced it would match NT Government spending with $550 million for five years so that the two Governments' Indigenous housing program could continue.

But residents of Territory communities left out of the program — which has run for the last decade — have vented their frustration at being overlooked.

Residents of Yarralin, 750 kilometres south of Darwin, on Thursday told representatives of the Department of Prime Minister and Cabinet and the Territory Housing Department they had had enough of broken promises and delays.

But the Department of Prime Minister and Cabinet's Senior Land Branch adviser, John Litchfield, surprised everyone at the meeting with an unreserved response.

"We agree that this has taken far too long, so I am willing to apologise on behalf of the Australian Government for that delay," he said.

"People get wrapped up in government-to-government discussions and forget about people in the community and what this is all about, and for that I apologise."

NT Government representatives promised the community work on new houses would begin in October.

Irene Williams has no bathroom or kitchen sink in her Yarralin house. ( ABC News: Jane Bardon )

'Appalling conditions'

The community has not had any new houses built for nearly 20 years, said Brian Pedwell, Mayor of the local Victoria Daly Local Council.

"The conditions are appalling, disgraceful. For my nieces and that, to live in that situation is— we're in the 21st century now, and we're still back in the dark ages," he said.

Yarralin health clinic receptionist Irene Williams invited the ABC into the one-bedroom tin shed house she shares with three other adults and her two children.

There is no bathroom or kitchen sink, and residents share an outside toilet and shower shed with neighbouring houses, while the kitchen is open to the elements.

The house cannot be locked, so Ms Williams said her food was often stolen, and the tin roof leaks.

"I feel so ashamed showing you inside, our living conditions here aren't good," she said.

"It's very cold at the moment, and in the summer it's very hot.

"I've been living like this in this house for four years.

"The community has been waiting too long for new houses. Promises made, for nothing."

'I thought it was going to happen quick'

Yarralin school assistant teacher Samantha Campbell lives in a dilapidated two-bedroom tin house with three other adults and her seven grandchildren.

She is also desperate to improve her living conditions.

Samantha Campbell is now hopeful new housing will finally go ahead. ( ABC News: Jane Bardon )

In 2016, her hope that there would be new houses built in Yarralin was raised when traditional owners were returned their land rights after a 40-year struggle.

During his congratulatory speech, Federal Indigenous Affairs Minister Nigel Scullion promised Yarralin 20 new houses, with upgrades to another 17.

The houses have not been delivered.

"When they promised us I thought it was going to happen quick, but I tell my grandchildren, 'at least we've got a roof over our head, we've got to wait'," Mrs Campbell said.

The promise of new housing under the joint Government program stalled while the federal minister pushed the community to sign a 99-year township lease that would allow private businesses to be established on their land.

"When we got our land back in 2016 we said to the Minister, 'we're open for business'," said Mr Pedwell.

"It would have showed us good faith that the Government was willing to work with community, but we didn't get that from the Government and that's the disappointing thing."

New commitment

On Thursday, both Governments sent representatives to Yarralin to announce that they would recommit to building the houses in exchange for a five-year NT Government lease over the housing areas.

Mayor Brian Pedwell says the community feels insulted by the negotiation process so far. ( ABC News: Jane Bardon )

The Commonwealth's representatives said the Federal Government could wait to recommence long-term township lease negotiations.

At a public meeting, the community agreed to the five-year lease terms, but the Government representatives did not escape a verbal lashing.

"We feel like we've been insulted and no-one here has bothered to apologise to the community, and we don't feel that we've been dealt with fairly," Mr Pedwell said.

Following Mr Litchfield's apology, Government representatives raised the possibility that more than the promised 20 new properties would be delivered, if the community accepts some duplexes on blocks where single houses currently stand.

Despite their long frustration, most community representatives left the meeting with more optimism than they had had in years.

"I'm excited now that they've come and told us; I can't wait," Ms Campbell said.

Mayor Brian Pedwell (R) and community members vented their frustration at Thursday's meeting in Yarralin. ( ABC News: Jane Bardon )

'We took responsibility for that'

Mr Scullion later told the ABC he decided not to require the 99-year township lease from Yarralin, and instead allow houses to be delivered under a five-year lease.

"I decided that I would make an unprecedented step to move away from the township lease to allow a further five years for them to be able to consider that, given that they've only just had their land back, so I've released houses and I've decided to go for a five-year housing agreement," he said.

"Now that was quite complex and involved the Northern Territory Government and the Northern Land Council.

"Someone stood up at the meeting and said 'it's taken too long' and we acknowledged it had, and we took responsibility for that."

The Northern Land Council's chief executive Joe Morrison welcomed the movement on Yarralin's housing.

But Mr Morrison called on the Commonwealth to extend its NT Indigenous housing funding commitment beyond five years.

"If we're going to get Aboriginal people into the 21st Century in terms of their economics and in terms of their health, then there needs to be a very long approach to all of this," he said.

"And five years is welcome but there needs to be a generational approach to this, to overcoming the disadvantage that Aboriginal people are finding themselves in."