Queensland Premier Peter Beattie has supported calls for Indigenous students to be sent to city boarding schools to address chronic academic underachievement at Cape York.

Noel Pearson from the Cape York Institute of Management says high school retention rates are poor in many Aboriginal communities, which is encouraging welfare dependency.

He says this year $34 million will be spent on education in the Cape but only 6 per cent of students will complete Year 12, prompting his suggestion.

Mr Beattie agrees education outcomes are not good enough, but says the option of boarding school must be voluntary.

"There are a number of Indigenous children who go to boarding school already, not a large number but there already is, we are prepared to talk to them," he said.

"It would need to be voluntary, we wouldn't want to compel anybody to do anything of the kind, but if that's one of the solutions we're prepared to talk in a very constructive way with Indigenous leaders.

"Maybe the Commonwealth and the state can work together to put up a series of scholarships. I remember the old Commonwealth scholarships made a huge difference to a range of people in a community and I was one of the beneficiaries of that.

"So maybe we can in fact do that. And I'm happy to talk to them, if Noel and I get a chance we should talk about it in the near future and I'm happy to talk to the Prime Minister, but it needs to be voluntary."

But Aboriginal leader Doctor Mick Dodson has offered cautious support.

While admitting education standards and services need to be improved, he says personal experience shows that removing Aboriginal children from communities may not be the answer for everybody.

"I was at a school reunion last week of my old school, it was a boarding school and there were quite a few Aboriginal kids there from up north, but they're doing it hard," he said.

"They find it very difficult. I managed to sit down and talk to them and the thing they missed most is mixing with their culture and their people, and that's a big thing to ask kids to give up."