The people of Norfolk Island have reacted angrily to a proposal to strip them of self-government, prompting a direct appeal in a letter last week to the prime minister, Tony Abbott.

Norfolk’s minister for cultural heritage and community services, Robin Adams, said residents were desperate to keep their nine-member parliament, and a proposal that Canberra take over administration of the island was disrespectful and not logical.

A federal parliamentary committee report on the island’s future, released last year, recommended Norfolk’s Legislative Assembly be abolished due to concerns over the community’s worsening economic prospects.

But Adams said suggestions that the island couldn’t manage its own finances or address key infrastructure and sustainability issues were incorrect.

Since 1979 the island had only twice sought financial assistance from the commonwealth in the form of interest-free loans, firstly to resurface the airport’s runway, and then for a cliff stabilisation program, she said.

Adams said that the proposal to abolish the parliament also overlooked the fact that the Norfolk government in 2010 entered into a memorandum of understanding with the federal government to join Australia’s taxation and welfare systems.

The Norfolk Island government has proposed that it become a territorial model of government similar to those in the Australian Capital Territory and Northern Territory, and then be eligible for a share of goods and services tax revenue.

“We’re in an absolute hiatus of uncertainty in this community,” Adams said.

In a letter sent to Abbott last week, Adams tells the prime minister the proposal that Canberra take over administration of the island is disrespectful, particularly to people of Pitcairn descent, and has no practical or logical basis.

“The apparent lack of respect being shown to the people of Norfolk Island of Pitcairn descent is distressing to many here on the island who have voiced their deep concerns to me that yet again they are being threatened with the loss of self-government ... and a lack of a codified recognition of them as a people going forward,” the letter says.

The letter was also sent to the deputy prime minister, Warren Truss, and the opposition leader, Bill Shorten.

Adams did concede there was division in the community over the best way forward in terms of funding the island.

“But I think it would be fair to say that if there were a referendum on the loss of our parliament and the loss of self-government, the community would not agree to that,” she said on Tuesday. “Underlying all of this Norfolk Island, to the Pitcairns descendants, is their homeland.”