When the Canadian government established a new First Nation in Newfoundland it expected to get about 10,000 applications for membership. It got more than 100,000.

The government was stunned. The mountain of applicants was the equivalent of one in five people in the province. After just the first round of applications, when 23,000 of 30,000 applicants were granted Indian status, the Qalipu Mi'kmaq were already the second largest First Nation in the country.

The size of the response was "neither reasonable nor credible," the federal government said. The financial implications were significant, considering the health and education benefits due to status Indians in Canada. The government, in concert with band leadership, moved to tighten the membership criteria.

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Now a new law before Parliament would allow the government to review and revoke the Indian status of those who've already been approved. The Bill, C-25, would also bar anyone from suing the government for the way an application was handled.

The new measures will undoubtedly limit the band's size. But some of those expecting to be rejected say it's wrong to deny them their identity, even if it's relatively new. What began as an attempt to right a historical wrong is likely to leave tens of thousands feeling as though they've been wronged again.

"This whole process has been bungled," said Hector Pearce, vice-chair of the Mi'kmaq First Nations Assembly of Newfoundland. "They just made a mess of this from the beginning."

Mr. Pearce, a 69-year-old retired psychologist, only realized he was aboriginal about eight years ago, he said. Like many who made similar discoveries, it has been a cultural awakening for him. Some accuse the applicants of seeking financial gain, but Mr. Pearce says that's nonsense. He doesn't need the benefits, he said, it's a matter of principle.

"I don't want people to tell me I'm not something I am," he said.

Mr. Pearce expects his claim will be rejected. That's because applicants now have to prove a current and substantial connection, that can't be "of recent vintage." They were told to find evidence such as old census forms or job applications where they ticked an aboriginal identity box. They were asked for phone records or plane tickets that could prove a continuing connection to a Mi'kmaq community, if they didn't reside in one. And a points system was devised to evaluate their claims.

"I can't provide documentation that I applied for a job or that I sent documents to governments where I identified as aboriginal," Mr. Pearce said.

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The roots of the controversy date back to Newfoundland's entry into Confederation 65 years ago. Aboriginal people were not mentioned in the Terms of Union, which left their status unclear.

At the time, the province believed there were 530 First Nations people on the island, according to historian David Mackenzie. It was well known that the Beothuk people had been wiped out by the 19th century. The Mi'kmaq had settlements in Western and Central Newfoundland, but by 1949, the sense among those negotiating the Terms of Union, none of whom was aboriginal, was that Newfoundland had very few aboriginal people. As a result Newfoundland's aboriginals were not subject to the Indian Act, which governs relations between Canada's 600-plus bands and the federal government.

Most Mi'kmaq were perceived to have assimilated, intermarried or chosen to hide their identity. With the passage of time aboriginal groups emerged to demand recognition. By 2008, the government concluded a deal to create a landless band – in other words, without a reserve – for the Qalipu (pronounced hal-e-bu).

The entry criteria were initially relatively broad. There was no blood quantum requirement. Applicants needed to self-identify as native, to be accepted as Mi'kmaq and to demonstrate native ancestry connected to a Mi'kmaq community before 1949. In the first round, just filling out an application was considered proof of self-identification.

Aboriginal Affairs Minister Bernard Valcourt told a House of Commons committee recently that the first batch of 30,000 applications was more than expected, although not out of line with 2006 census figures that showed 23,000 in the province self-identified as aboriginal. But 101,000? That raised "significant questions about the credibility of the process," according to Mr. Valcourt. The minister was not available for an interview on this subject. He told the committee that the new Bill will ensure applicants meet the conditions for membership while respecting the government's "responsibility to taxpayers."

Angela Robinson, an anthropologist at Memorial University, said the trouble stems from the initial criteria for belonging. The criteria were broad, which encouraged many people to apply. Now the government is scrambling to undo what's been done.

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"I think they're trying to get the proverbial worms back in the can," said Prof. Robinson.

Jaimie Lickers, a lawyer at Gowlings, is representing the Mi'kmaq First Nations Assembly of Newfoundland. She's exploring legal options for those who expect to have their applications rejected. Hundreds have been tossed out for minor administrative errors, with no right of appeal, she said. One man had his application rejected for failing to submit a long form birth certificate. He cannot appeal or correct the error, according to the letter he received. Another man was rejected for omitting a signature, she said.

"We're talking about lifelong entitlement to Indian status and band membership. Recognition of your heritage," Ms. Lickers said. "To be disqualified from that because you forgot to include a longform birth certificate is ridiculous."

Ralph Loder is one of those who discovered his Mi'kmaq heritage just four years ago. He traced it back to Jane Matthews, a Mi'kmaq woman who married an Englishman, Ralph Brake, in the late 1700s. He says he's not surprised by the large of number of applicants. On his family tree there are 1,700 people "and they're all native," he said, even if few are recognized as such. He lives in an area traditionally inhabited by Mi'kmaq, but he's not sure if he'll be approved.

"They're trying to cut the numbers down. There's no doubt about it," he said.