The federal government now says it will work with Yukon’s Carcross Tagish First Nation to resolve the band’s ongoing funding issue.

This is a change of tune from last month, when the First Nation’s chief said Ottawa was threatening to cut its funding because the band refused to sign its financial transfer agreement.

Ottawa had said it would not cut off funding if the First Nation signed an interim agreement. The Carcross Tagish First Nation refused.

The First Nation’s chief, Danny Cresswell, said the agreement was outdated and caused the band to be underfunded. He demanded new negotiations.

In a release Tuesday, the First Nation said it met with both Aboriginal Affairs and Northern Development Minister John Duncan and the Prime Minister, who both resolved to work with the First Nation to settle the dispute.

“We had a frank and honest discussion with Minister Duncan. He listened and assured us that he would immediately look at C/TFN funding and if it was unfair compared to other self-governing Yukon First Nations, he would fix it,” said Cresswell.

However, Cresswell added that they have heard promises from the federal government before.

“But coming from the Prime Minister, we trust that Minister Duncan will be true to his word and work towards a speedy resolution.”

A line of Carcross Tagish First Nation protesters greeted the Prime Minister as he arrived in Carcross for a Conservative Party fundraiser earlier Monday. More than 50 of the First Nation citizens dressed in traditional regalia and lined the highway, singing and drumming.

The Prime Minister and Duncan were in Carcross, Yukon, Monday as part of Harper’s annual summer tour of the North.

He is continuing his tour today with stops at a mine in Yukon and a visit to Norman Wells, N.W.T.