Indigenous Affairs Minister Nigel Scullion has threatened to take away the last scrap of federal cash for remote housing in Western Australia under the 10-year National Partnership Agreement, Premier Mark McGowan says.
The agreement expires on Saturday and all that has been offered beyond that is one last $60 million payment for the next three years.
After Housing Minister Peter Tinley labelled the offer "inadequate" on Tuesday, Mr McGowan told parliament Senator Scullion had threatened to strip WA of the final cash from the old deal "because we dared to stand up for remote Aboriginal people".
He said he wrote to Prime Minister Malcolm Turnbull last month, detailing his concerns about the federal government's stance, but had not yet received a reply.
Queensland Premier Annastacia Palaszczuk wrote to Mr Turnbull in March, promising the state would contribute $1.08 billion towards a new agreement and requesting a proportionate cost sharing deal.
But last week, a delegation of indigenous mayors from Queensland met with Senator Scullion in a last-ditch lobbying effort for new money.
"It looks like the federal government is walking away from their responsibility of 50 years standing to provide support for housing and maintenance for remote communities in Western Australia and in Queensland," Mr McGowan said.
"The most disadvantaged people in this country, living in some of the harshest conditions."
While Victoria, NSW and Tasmania had opted out of the program, WA couldn't maintain standards at 165 remote indigenous communities without Commonwealth support, Mr Tinley said.
"The prime minister has made a virtue of using Closing the Gap ... yet he seems to think that when it comes to housing, they can walk away," Mr Tinley told ABC radio.
In a review of the agreement last year, the federal government estimated 2750 new properties were needed in the Northern Territory, 1350 in WA, 1100 in Queensland and 300 in South Australia by 2028 to address overcrowding.
The review stated the costs of the program should be shared 50:50.
Under the previous agreement, the federal government contributed $120 million a year to WA while the state spent about $86 million annually.
Senator Scullion told AAP Mr Tinley had recently advised he would consider the Commonwealth's offer, but was disappointed to have not heard back from him.
He said based on Mr Tinley's "latest dummy spit", he was unsure if $43 million to complete remaining housing works in the state beyond June 30 was also being rejected and called on the WA government to contact him about it.