A national report on child protection in the Northern Territory has blasted the system, saying it has abandoned the most impoverished children and families in Australia.

The secretariat of National Aboriginal and Islander Child Care says while the Territory has the highest levels of child abuse and neglect in Australia, it also has the highest level of non-reporting of cases and a disproportionately low number of children in protection.

It says non-government agencies see the system as almost completely ineffective, with chronic levels of poverty, homelessness and preventable diseases often viewed as normal for Aboriginal children.

The report says mandatory reporting of child abuse appears to have failed, police are ineffective in responding to cases and alternative and foster care options are woefully inadequate.

The secretariat's recommendations include independent reviews of all groups involved with child care, the creation of a NT child and family welfare council and a commitment of at least $20 million a year to a welfare reform package.