The band was at the centre of a violent dispute last summer over lobster fishing. Band officials said they were shocked by yesterday's move and suggested it is retaliation against the community of 1,300 that became a symbol for the advocacy of aboriginal rights.

The department insists that is not the case.

Indian Affairs takes tighter control of First Nations that run deficits exceeding 8% of their annual budgets.

Deficits "significantly higher" than 8% have been run for several years, and less intrusive management efforts have not worked, said Steve Outhouse, a department spokesman.

The accounting firm of Deloitte & Touche will take over the reserve's finances.

Burnt Church receives $9.2-million a year from the department to run programs.

Indian Affairs decided to step in when the band's most recent audit was received in January, Mr. Outhouse said. Audit details are confidential.

Mr. Outhouse said the move has "absolutely nothing to do with the fishing situation from last year." The band's financial troubles go back four years, he said, adding there are no allegations of criminal wrongdoing.

About one in four of Canada's 633 First Nations are experiencing some type of remedial management and more than 25 have lost direct control of their money.

In December, Brian Bartibogue, a band council member, told First Nations chiefs the federal government was making Burnt Church leaders "jump through hoops" for federal funding. He suggested it was payback for embarrassing Canada internationally with TV images of federal officers clashing with natives on East Coast waters.

"That's the general feeling," Karen Somerville, a spokeswoman for Burnt Church, said yesterday.

The decision comes a month after Ottawa outlined its plan to implement the Sept. 17, 1999, high court ruling in the Mi'kmaq Donald Marshall case, which upheld the 1760 treaty rights allowing Mi'kmaq and Maliseet bands to earn a moderate livelihood through hunting and fishing. There has since been turmoil near Burnt Church, where the natives have rejected Ottawa's overtures to implement the decision.

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