Northern Territory Labor's reversal on the "disastrous" Binybara/Lee Point development shows the project is untenable, Senator Lidia Thorpe says, as calls to abandon the federal project continue.

The controversial Defence Housing Australia (DHA) project — long opposed by Larrakia Traditional Owners and environmentalists — had been supported by the NT Labor government during its eight years in power from 2016 to 2024. However, in a backflip last week, Labor's ultimately successful candidate in the Nightcliff by-election, Ed Smelt, said the party had changed its position on the project and was "very proud to do so".

"That was the feedback we had from the community, was that we didn't get that right in the last term of government," Mr Smelt said on ABC Radio.

The Binybara/Lee Point development masterplan covers 131 hectares and is planned to deliver about 800 homes, with land clearing for the first stage already finished. The area holds deep cultural and ecological significance, forming part of the Kenbi Dreaming track and providing habitat for the endangered Gouldian finch.

Senator Thorpe has long criticised the development, which is currently halted while a legal challenge brought by Traditional Owner Tibby Quall proceeds.

"Larrakia Traditional Owners have opposed this project from the beginning and have not given consent for the destruction of their Country," Senator Thorpe told National Indigenous Times.

In 2024, the Victorian Senator tabled a petition in federal Parliament with more than 16,000 signatures calling for Binybara/Lee Point to be returned to the Larrakia people, and argues the project — supported by the federal government — will "destroy Larrakia sacred sites and critical habitat for endangered species".

The Gunnai, Gunditjmara and Djab Wurrung woman says the federal government has "so far refused to listen to Traditional Owners" over the development, and questioned whether it would be "willing to listen" to its Northern Territory counterparts.

"The Albanese government should cancel this project and put a stop to the destruction of Binybara/Lee Point once and for all," she said. "And I look forward to seeing NT Labor and the Minister for Indigenous Australians protesting with the people against this."

National Indigenous Times contacted the Minister for Defence Personnel, Matt Keogh — whose portfolio includes DHA — asking whether NT Labor's change in position would be reflected federally and whether there had been consultation between the federal and territory branches, but the Minister's office did not reply before publication.

Executive Director of Environment Centre NT, Dr Kirsty Howey said she expects Mr Smelt and Territory Labor to "stick by his concession that Labor got it wrong on Lee Point".

"This is a significant policy shift that accords with the wishes of Larrakia Traditional Owners and the local community," Dr Howley told National Indigenous Times. "The pressure is now on for Federal Labor, who are the real decision makers, to change their position on this unpopular development."

Nightcliff is widely regarded as one of the Territory's most progressive electorates. Kat McNamara — who stood down for health reasons — became the first Greens representative in the NT parliament in 2024 after defeating former chief minister Natasha Fyles.

Despite Mr Smelt's backflip, Senator Thorpe noted politicians too often appear to rediscover their conscience before an election, only to "lose it again afterwards". She called on the community to hold NT Labor to account over its promise.

"Territory Labor should now be strongly lobbying their federal colleagues to stop the destruction," she said. She claimed she will be raising the issue with federal Labor MPs in Canberra "who have the power to cancel this project".

The project has faced criticism since it began. In March 2023, then-environment minister Tanya Plibersek rejected a cultural heritage protection application for the area, saying she was "not satisfied" it contained significant Aboriginal sites. The same year, the Larrakia Nation Aboriginal Corporation withdrew its support for the project, whilst protests at the site have led to clashes with police as community members attempt to defend the area.

In 2024, DHA began clearing bushland without securing all required approvals and was fined $18,780 by the federal Environment Department.

Last year, the Northern Territory Civil and Administrative Tribunal (NTCAT) ruled the clearing of the site must stop until Mr Quall's challenge is resolved. The Larrakia Danggalaba Elder said the Heritage Council had ignored his earlier warnings about sacred sites and cultural artefacts in the area, including a grindstone and stone tools.

NTCAT found Mr Quall is an owner of the artefacts.

"The Old People would be very happy and very sympathetic to land rights and cultural rights. It's a big thing for Larrakia people to win a case about land, especially around our sacred areas," he said at the time.

"Darriba Nunggalinya, he is our creator and the most powerful site. Old Man, he is our creator of everything, the land, the law, everything on the land, the people."

Last month, NT News reported that DHA representative Brendan O'Brien told City of Darwin councillors work on the development would resume this year for the first time since late 2023. He said DHA expects Mr Quall's court case to be decided in April.

"We're going to commence construction, no matter what the outcome. Obviously, we believe we have a strong case, but no matter what the outcome, there will be a project there, and we are committed to getting on with that project this financial year," Mr O'Brien said.

In response to questions, a DHA spokesperson told National Indigenous Times: "DHA is awaiting determination of one outstanding matter with the NTCAT, expected in April."

"This matter is in relation to one area within the Lee Point development and proceedings will not impact commencement of construction in areas outside of that scope later this year," the spokesperson added.