The Federal Government is planning to use decades-old housing that was decommissioned by Defence to ease "appalling" housing conditions in a remote Northern Territory Aboriginal community.

Key points: Twelve dwellings removed from Darwin's RAAF base would be used in Borroloola under a Federal Government plan

Twelve dwellings removed from Darwin's RAAF base would be used in Borroloola under a Federal Government plan The NT Government has warned the ex-RAAF houses are "not a viable solution"

The NT Government has warned the ex-RAAF houses are "not a viable solution" Labor senator Malarndirri McCarthy has questioned the safety of the proposal

The special envoy on Indigenous affairs, Tony Abbott, this week hinted at a new housing initiative for Borroloola, 700 kilometres south-east of Darwin, but provided no further details.

But the ABC has confirmed the Federal Government is planning to purchase 12 dwellings that were removed from Darwin's RAAF base in 2013 and send them to Borroloola.

Details about the plan were discussed at a meeting on Tuesday between NT Government officials, Prime Minister and Cabinet representatives and an Australian Army colonel.

The ABC understands NT officials told their Commonwealth counterparts the ex-RAAF houses were "not a viable solution" and that the community would consider them "old".

But the Federal Government representatives said the ex-RAAF houses should be regarded as "transitional accommodation" lasting between two and five years, and they would be gifted to the NT Government on completion.

A spokesman for the Indigenous Affairs Minister insists that no ex-Defence houses have been purchased by the Federal Government.

The dwellings will be sent to Borroloola, 700km south-east of Darwin ( ABC News: Mitch Woolnough )

They said the Department of Prime Minister and Cabinet was consulting with the community and the Northern Land Council to determine an appropriate approach to address urgent housing needs, but would not provide any further details.

Labor senator Malarndirri McCarthy, who grew up in Borroloola, said there were several questions Mr Abbott and the Indigenous Affairs Minister Nigel Scullion needed to answer about their housing plan if it were to go ahead.

"If Defence found these houses unusable, can they answer the questions about are they safe?" she said.

"Has asbestos been in these houses and, if so, has it been cleared?

Are these 30-year-old houses capable of making the 1,000 kilometre journey to Borroloola? Who is going to locate the houses? Is it local employment? How much is it going to cost?"

Project to 'get housing outcomes quicker'

The ABC understands the supplier of the houses, which took ownership of the dwellings from Defence in 2013, advised the Federal Government that asbestos had been cleared.

Mr Abbott visited remote NT communities in September, and said Borroloola's housing was "appalling". ( Twitter: Tony Abbott )

Mr Scullion's spokesman said: "The Minister has been talking to the Northern Land Council and his Department is engaging with the residents of Borroloola on options to get housing outcomes quicker than the Northern Territory Government can provide."

The Territory Government this week confirmed its plans to build 38 new or replacement homes in Borroloola's town camps.

Tenders are expected to be released next month and the NT Housing Minister Gerry McCarthy said he expected the new homes to be built in 2019, or 2020 if weather conditions delayed the project.

The latest announcements came almost a decade after the Federal Government allocated $15 million for housing improvements in Borroloola, but that money has never been spent because of ongoing issues around long-term leasing agreements.

"The Minister is frustrated that the residents of Borroloola have been waiting too long for the Northern Territory Government to deliver the housing investment promised to the community," Mr Scullion's spokesman said.

It remains unclear whether the ex-RAAF houses will set up in Borrooloola's four town camps, or in the township itself, but officials at Tuesday's meeting discussed the use of freehold land.