The Aboriginal people lived in Australia before European settlers began to arrive in the 18th century. Aboriginal land ownership was based on their custom and tradition, not a formal written land title system.

A 1992 court case, dubbed the Mabo case, saw the first formal recognition of native land rights. In its decision, the Australian High Court ruled that the existing legal doctrine of "terra nullius" - the idea that land was not owned by anyone - did not apply to Australia.

Aborigines make up 1-2% of the population

The Mabo judgement held that a local native group had 'native title' to land that had been taken from them during colonisation. It also said that native title to land does not necessarily exclude existing title rights to land, meaning both could co-exist.

Legislation for land

As a result of the 1992 decision, the government legislated to provide a system for Aborigines to claim rights. The result was the Native Title Act, passed in December 1993.

The act said that if native Australians could demonstrate a "traditional connection" with their land, they could have native title provided it was land that had not been sold to anyone else.

But this left unclear the crucial question of the status of pastoral lease land, land that farmers lease from the state. And it is whether native people can claim this land that has led to the current crisis.

Pastoral lease land amounts to between 40% and 45% of the Australian continental land mass. The Aborigines currently number between 300,000 and 400,000, only about one to two percent of the Australian population.

The act also left unclear whether pastoral leases extinguish native title in the same way that a grant of freehold does. The grant of freehold erases native title because it allows the owner exclusive possession.

To test the pastoral issue, the Wik people of Cape York in far North Queensland took their case to court. On December 23, 1996, the High Court said that that native title and pastoral leases could co-exist.

But the court also said that if there were conflict between the rights of the pastoral farmer and the rights of native title right holders, the pastoralists rights would prevail.

This caused problems for leaseholders and for the government who potentially would have to pay compensation for taking away any native title property rights. The Australian constitution specifies compensation for all compulsory property acquisitions and equal treatment for all races.

The government has reacted by trying to pass a bill which would essentially reverse the 1996 ruling by the Australian High Court. But critics say that it weakens native title holders' rights and that it is racist and discriminatory.