A controversial native title claim involving millions of dollars of royalties from the world's largest export silica mine in north Queensland could be in jeopardy because the funds for fighting the claim have run out.

Last year, the Aboriginal Dingaal clan in the north Queensland town of Hopevale filed a native title claim for the Cape Flattery region which includes a highly profitable silica mine run by Mitsubishi.

At issue is millions of dollars of royalties, currently around $600,000 annually in privately negotiated royalties which flow to the Hopevale Aboriginal Community Council. The royalties are expected to last for around 100 years.

However the money instead could flow to a select group of Hopevale's 800 Aboriginal residents should the native title claim succeed.

Hopevale is a former Lutheran mission which in 1986 was granted in trust to its Aboriginal residents. Its most famous citizen is Noel Pearson, the executive director of the Cape York Land Council, the man who helped draft the country's native title law.

The land council and Mr Pearson, who has no native title claim in Hopevale, has promoted the sharing of royalties by the entire Hopevale community. Mediation has occurred in an unsuccessful attempt to strike a deal with the clan.

The funding of the clan's claim has therefore been highly contentious and sensitive, but no more than recently when the land council acknowledged it had already exhausted its funds for the controversial claim for the rest of the 1995/96 financial year.

Because of this, an unusual situation has developed where the Federal Government is directly funding a native title claim in the heartland of one of Australia's most powerful land councils.

A clan spokesperson, Mr Gordon Charlie, said the federal Attorney-General's Department of Legal Aid and Family Services had given $14,000 in emergency legal aid early this month for mediation. But future funds for the controversial claim are by no means certain, he said.

The Cape York Land Council yesterday confirmed the $25,000 available from ATSIC to fight the claim had already been handed over to the clan and were exhausted for 1995/96.

The land council's Legal Officer, Michael Neal, said a reason the funds were exhausted could be the fees charged by the private legal firm representing the clan.

On the other hand, it appears the clan's funding through the land council has been limited by ATSIC.

Early this year the ATSIC Peninsula Regional Council on Cape York opposed a plan to give the Dingaal $40,000 because the claim was "not seen as a priority as the Dingaal people already lived on Aboriginal land".

In March, Gerhardt Pearson, the ATSIC commissioner for Queensland's far north and western zone and Noel Pearson's elder brother, said "it greatly disturbs me" that ATSIC's central office Native Title Unit recommended funding the Dingaal claim $10,000 in 1994-5, and $40,000 in 1995-96.

Mr Charlie said the exhaustion of funds early in the financial year meant the clan depended on emergency legal aid if its claim was to proceed.