A plan to move flooded residents of Lake St. Martin closer to home is in jeopardy over a dispute between the chief and the provincial government.

The province had agreed to set up a temporary mobile home village on a former radar base near Gypsumville, and was negotiating with Chief Adrian Sinclair when he walked away from the deal.

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Floodwaters swamped Lake St. Martin First Nation in the spring and continue to plague the reserve. (CBC)

CBC News has learned that Sinclair and a private partner became directors of a company in hopes of supplying 150 mobile homes for the project. But when Sinclair failed to get the contract from the province, he walked away from negotiations for the relocation as a whole.

"Yeah, they didn't accept our bid because they said our prices were too high," Sinclair said, admitting that's why he walked away.

"That's why we're still at it today. We're still here. We're still in Winnipeg."

While the government says it isn't convinced the company reflects community ownership and benefit, documents obtained by CBC today appear to indicate otherwise.

The band provided documents showing that Lake St. Martin would be the beneficiary of 60 per cent of profits from the company, not Sinclair personally. A private contractor would receive the remaining 40 per cent.

A letter from deputy housing minister Joy Cramer said government raised concerns about the way the company was structured in a meeting on Nov. 18. But the minutes of that meeting show no such concerns were discussed.

Lake St. Martin First Nation, about 280 kilometres north of Winnipeg, has been plagued by flooding for decades but this year's disaster doomed the site.

About 600 residents were forced from their homes in May, and provincial officials say the reserve is beyond reclamation.

Since then, the evacuees have been staying in various locations in Winnipeg.

One of those evacuees, Gordon Traverse, longs to leave Winnipeg and get back some semblance of a normal life.

"I'm not city dweller myself. I've been a country man all my life," he said.

He's angry the chief is slowing up the relocation process.

"Listen to your community [and] what they want. They're probably going to tell them we want to go home," Traverse said about the chief.

A spokesperson for the province said they will go ahead and set up the temporary housing despite objections by Sinclair.

He has refused to agree to the move but the province says it is setting up the homes anyway and has over 500 people who want to move to the site.