Attawapiskat band councillors turfed a federal appointee in charge of overseeing the troubled band's finances on Monday when he showed up in the remote Northern Ontario reserve.
But federal officials say the appointee is still in charge of the money, and will continue to control the band's financing even if he is not allowed into the community.
"The third-party manager, Jacques Marion, wished to respect the volatile situation and is currently not in the community," said Michelle Yao, a spokeswoman for Aboriginal Affairs Minister John Duncan.
"He remains in full control of funding from Aboriginal Affairs to the community and is hoping to work with the community to address urgent needs," Yao said in an email.
Grand Chief Stan Louttit confirmed the move, saying Chief Theresa Spence and her council have made their stance clear: they see Ottawa's decision to appoint a third-party manager as a political move meant to silence their cry for help.
The federal minister is only making a bad situation worse, Louttit said in an email to The Canadian Press.
"I would hope that he would see the merit in working together to seek solutions rather than imposing government financial actions on a crisis-ridden community," the Grand Chief said.
The community of 2,000 declared a state of emergency at the end of October after a severe housing shortage forced at least two dozen families to live in temporary shelters, some without insulation or plumbing.
The federal response has been two-fold. It advanced half a million dollars to speed up renovations on housing to prepare better shelter in time for the onset of winter; and last week it told the band that it was putting its finances under the control of a third party, as well as undertaking another audit of the band's spending.
"It is incredible that the Harper government's decision is that, instead of offering aid and assistance to Canada's first peoples, their solution is to blame the victim and that the community is guilty and deserving of their fate," Spence and her band council said in a statement last week.
That sentiment was echoed by many a chief in Ottawa on Monday in preparation for a few days of annual meetings with the Assembly of First Nations. Some of their band members are collecting furniture and clothing to send up to families in the northern community, and many of them are expressing their solidarity through social media.
But while Duncan did not had much active involvement in the Attawapiskat file until it caught national attention over the last 10 days, he seemed determined not to waiver from his plan Monday.
"It is extremely worrying that the chief and council are not open to outside assistance," Duncan's spokeswoman said. "Our government's priority is to ensure that residents of Attawapiskat have access to safe, warm and dry shelter."
Duncan met with both Spence and Louttit in Ottawa late Monday afternoon. The native leaders are in town this week for meetings with the Assembly of First Nations.
He urged them, publicly and privately, to co-operate with Ottawa's "plan of action" and with the third-party manager, for the sake of the people of Attawapiskat.
But the appointment of a third-party manager has been widely denounced by First Nations groups as well as opposition parties.
Liberal aboriginal affairs critic Carolyn Bennett said the conflict should tell the federal Tories that they can't impose solutions on Attiwapiskat unilaterally.
"The government's approach is not helping the people of Attawapiskat who are sleeping in sub-zero temperatures tonight," Bennett said.
"This situation is the direct result of a government that shows a callous disrespect for the community, and assigns blame rather than working with the leadership to come up with long-term solutions."
A third-party manager is usually named to reserves where there are irregularities in the handling of government funds. But even before that move, Attawapiskat had to produce regular, thorough and public audits to meet Ottawa's demands on accountability.
"I think it was a knee-jerk reaction," said Six Nations Chief Bill Montour, referring to the government's decision to send in an outside financial consultant.
Restrictions on band spending were already so strict that councillors had to be accountable for every line item in their budget, and had very little leeway for financial flexibility let alone long-term planning, Montour said.
It's an issue that frequently bedevils First Nations across the country as they try to deal with chronic housing shortages and dilapidated infrastructure, he added during a break in a meeting with other chiefs and advisers about housing.
He would like to see more power given to First Nations to make their own local decisions, but he is also urging more immediate, practical solutions. He would like to see the key federal decision-makers on housing policy include First Nations advisers.
"There's not one brown face there," he said.
And he would like bands that have developed good models for building sturdy homes in native communities to be able to train workers from other communities.
Band members should also be allowed to have some kind of stake in their homes, added Chief Gilbert Whiteduck of the Kitigan-Zibi reserve in West Quebec.
His community is one of a very few without a housing shortage, partly because the band has found ways to continually invest in housing, and also encourage band members to take out loans and pay for improvements in "sweat equity," he said.