The occupation of Canberra's Lobby Restaurant threatened to become a new front in the stand off over Indigenous land rights on Wednesday, as elders and representatives of the federal government failed to reach agreement over control of the building.
Days after embassy activists forced their way into the empty restaurant near Old Parliament House, the federal government requested the building to be vacated during tense negotiations with Ngunnawal elders and the Australian Federal Police.
Asserting their ownership over land in the parliamentary triangle, the elders and about 20 people from the embassy encampment told acting National Capital Authority boss Andrew Smith they would not leave the Lobby, demanding access to building for accommodation and to access toilets and a kitchen.
Mr Smith and National Capital Estate director Lachlan Wood walked away after more than 20 minutes of discussions, while the elders later requested a one-week grace period to occupy the building and continue negotiations.
Mr Smith said repeatedly the occupation was illegal and could not continue.
Tent embassy residents say the authority's "failure to seek permission ... or sign a treaty or lease the land from Ngunnawal traditional custodians" is the reason for their takeover of the building, left empty by previous commercial tenants before the end of a lease.
Elder Jenny Munro said the group would seek intervention from federal Indigenous Affairs Minister Nigel Scullion and wanted an Indigenous liaison to police to be present for future negotiations.
The group fears they could be forcibly removed from the building at any time.
"Our conditions for the National Capital Authority is these lands be returned to their rightful owners, the Ngunnawal people, and we start negotiating some sort of reparations for the illegal occupation for the time and the tenure they've been here," she said.
"They tell us that we are trespassing, it's a breach of the law but there are many instances where we consider they trespassed on our land and breach our laws.
"The problem with a lot of this is the two systems will keep clashing," she said.
The group has renamed the building as The Koori Rose Garden and hung Aboriginal and Koori flags inside.
They hope to turn the former function centre and restaurant into a a cultural centre or a cafe run by the tent embassy and are seeking more than $7 million in back-paid rent for the site, $3000 per week for nearly 50 years.
The National Capital Authority is yet to detail its plans for the site.
Mr Smith told the meeting the group had entered the building illegally and had no authorisation to remain.
"The National Capital Authority's view is occupancy of that building is not lawful and we are asking that you negotiate... and to leave the building," he said.
"I hear that you should have been consulted on this but at the moment our situation is that occupancy is not something we have agreed to.
Mr Smith said the authority was considering the best future use of the building and no final decision had been made.
AFP officers later told elders they had no authority to negotiate or to allow continued occupancy of the building, but if those inside left peacefully further negotiations with the federal government could take place.
The Aboriginal Tent Embassy has occupied space opposite Old Parliament House since four Indigenous land rights activists started a protest on the site on Australia Day 1972.