The Federal Science Minister, Peter McGauran, says he is confident of handing back land affected by British atomic bomb tests to its traditional owners, despite concerns about what it will cost the Commonwealth.

The land is in far north-west South Australia.

The Maralinga Tjarutja people say they will only take it back if the Federal Government agrees to indemnify them against future lawsuits and is responsible for any further remediation that may be needed.

Mr McGauran says he is more than happy to support those terms.

However, he says a demand of $7 million to convert left-over infrastructure into a management centre with tourist facilities will need to be examined.

"At this stage it's on the higher end of what we think is needed to restore the village and to equip it so it becomes an attractive tourist destination and is put on a long-term financially sustainable basis," Mr McGauran said.

"However, there's a long way to go yet, there's an air of cooperation and good will and we'll reach an agreement."