State Cabinet has considered a draft response to an inquiry which found Cape York Peninsular indigenous communities were in crisis.

Justice Tony Fitzgerald handed down his report in November last year.

The inquiry recommended that Aboriginal councils stop running their own alcohol canteens because of conflict of interest issues and instead handing control to the government or contractors.

It also called for more safe havens for women and children fleeing violence.

The Minister for Aboriginal and Torres Strait Islander Policy has spent several months consulting with indigenous communities but some say they have been ignored.

Others claim that to shut down canteens amounts to racial discrimination and they are threatening to take the Government to court.

State Cabinet has considered a draft response to the report and apparently agreed that further work was needed on a number of outstanding issues.

No one can say what those issues are and when the government's final response will be released.