Kakadu National Park management has asked the Northern Territory government to drop court action over an allegedly illegally disturbed Aboriginal sacred site.
Parks Australia - which is part of the federal government's environment department - says it's immune from prosecution and wants to restore ties with traditional owners so it can work with them to protect the World Heritage-listed park.
The NT Aboriginal Areas Protection Authority has refused to drop the case, saying it wants the matter to proceed.
Parks Australia is accused of building a walking track in Kakadu at Gunlom - a cascading waterfall that appeared in the movie Crocodile Dundee - without permission from the Indigenous custodians.
AAPA filed a criminal charge against Parks Australia in September under the NT's Sacred Sites Act 1998 for carrying out the uncertified work.
It says the track was constructed close to a restricted ceremonial feature against the wishes of traditional owners and without an AAPA Authority Certificate, which is issued after consultation.
Parks Australia has since penned an open letter to AAPA chief executive Ben Scambary "inviting him to consider whether pursuing the prosecution was the best way to protect sacred sites".
"Rather than engage in court proceedings around these issues, I strongly believe it would be preferable to work together with all stakeholders," Acting Director of National Parks Jody Swirepik said in the letter published on the Parks Australia website.
Lawyers for Parks Australia last month asked the NT Local Court to adjourn the case, saying "constitutional issues arise with this prosecution and as such, the defendant is required to issue notices to the Commonwealth, State, and Territory Attorneys General".
Ms Swirepik said constitutional issues were likely to arise in any matter where a state or territory brings a criminal case against the Commonwealth "due to the generally understood principles of Crown immunity".
In the letter published on Wednesday, Ms Swirepik also acknowledged the significant distress the Gunlom works had caused traditional owners and other members of the community.
"For this, I am genuinely sorry," she said.
Parks Australia is prepared to express contrition and make a public apology or issue a statement of regret about the importance of sacred sites and shortcomings in the process adopted for the Gunlom works, she said.
Ms Swirepik also said the offending section of the Gunlom walking track would be moved and an Authority Certificate had been sought and obtained.
AAPA said it welcomes Ms Swirepik's commitment to re-engage with Aboriginal custodians in Kakadu and move the walkway to where the Aboriginal custodians originally wanted it.
But it declined to drop the case, saying the Commonwealth hadn't advised AAPA about detail the constitutional issue it intended to use as a defence.
"The Authority welcomes them being aired in court," Mr Scambary said.
If the case does go ahead, the hearing is expected to run for about eight days and about 18 witnesses are expected to be called.
Before AAPA issues an Authority Certificate it consults traditional owners about the sites to understand how the sacred site should be protected, and what restrictions and conditions should be applied to the proposed works.
The maximum penalty under NT law for carrying work on a sacred site without a certificate is $314,000.
The matter will return to court for a directions hearing on April 30.