Independent Senator Lidia Thorpe has called for federal intervention after it was revealed Defence Housing Australia would not be reprimanded for allegedly illegally clearing land.

The clearing, which took place in May on Larrakia Country at Darwin's Binybara/Lee Point breached the NT's Planning Act.

However, it was reported yesterday the Development Consent Authority (DCA) - a body in the NT Department of Lands, Planning and Environment - had declined to prosecute or take any further action against DHA.

The area has been stoutly defended by Larrakia people and environmentalists in the wake of a proposed multi-million-dollar project, which would clear 132 hectares of old growth coastal bushland for 800 houses for the DHA — a federal government enterprise.

Larrakia Elder and Traditional Owner, Tibby Quall, said the land was a "religious" area for Larrakia people.

He said he was "disgusted and shocked" with the decision not to prosecute, arguing the DHA had "ripped up the land" and "deliberately wrecked it".

"We have laws and customs that maintain the heritage there. Long before they made the decision to bulldoze it, it has always been our land, and continues to be," he said.

"They should have spoken to me. They haven't followed customary law."

Senator Thorpe called on Federal Environment Minster Tanya Plibersek to act, arguing the DHA can't be allowed to have a "blatant disregard for the law, the environment and Larrakia cultural heritage".

"This would just signal that it's acceptable to destroy Country and cultural heritage," the Gunnai Gunditjmara and Djab Wurrung senator said.

She said the only option left, after the DCA declined to prospective or punish the DHA, was through federal intervention, citing the Environment Protection and Biodiversity Conservation (EPBC) Act.

"Minister Plibersek must ensure DHA's illegal destruction of sacred Larrakia Country at Binybara/Lee Point is thoroughly investigated and that they are held accountable."

A Department of Climate Change, Energy, the Environment and Water spokesperson told National Indigenous Times on Monday the department's investigation into the matter is ongoing, and they didn't provide comment on matters that are subject to open investigations.

The DHA paused works at the site on May 7 this year after allegations close to eight hectares of bushland had been cleared without appropriate approvals between April 30 and May 2, potentially breaching the NT's Planning Act.

The ABC's 7.30 report also showed the DHA had also allegedly breached the EPBC Act by bulldozing land without necessary approvals in place.

The development appeared to show the clearing extended beyond the approved area in a six-hectare area known as Stage 3, despite DHA only having approval to work on Stages 1 and 2 of the development.

Internal emails have revealed the DHA was aware they didn't have planning approvals when bulldozers began clearing the area. They argued they had been granted "conditional approval" for the Stage 3 clearing on May 3, after the land had been cleared.

In August it was revealed the DHA was being investigated at both Territory and Federal, and for six months, the development has been paused.

However, the DCA found the breach had "ceased", NT News reported, with the site now compliant with the Planning Act.

Describing NT authorities as "gutless," Senator Thorpe said it was now a federal responsibility.

"This is a demonstration of just how weak this country's environment and cultural heritage laws are," she said.

"A clear breach of NT legislation and the EPBC Act is being met with no consequences, not even a slap on the wrist."

Lawyers for the Environment Centre NT were advised on November 15 no prosecution of the alleged unlawful clearing by DHA at Lee Point would occur, despite an apparent finding that a breach had taken place.

"This inexplicable decision to drop the investigation is a massive blow for the thousands of Territorians who have rallied to save Lee Point and shows the laws protecting nature in the Northern Territory are utterly and profoundly broken," executive director of Environment Centre NT, Kirsty Howey, said.

"We are considering all legal options in the face of this devastating decision."

Ms Howey reiterated Senator Thorpe's calls for Minister Plibersek to "investigate and prosecute" the DHA after the "failure" of the NT government to do so.