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Chief Guy Lonechild says an interim board for First Nations University will be in place early next week. ((CBC))

The federal government will not increase financial support for a troubled First Nations university in Saskatchewan following the cancellation of its provincial funding earlier this week.

Students of the First Nations University of Canada and some chiefs at its controlling agency, the Federation of Saskatchewan Indian Nations, are calling for Ottawa to step in and replace the $5.2 million in funding the province provides the school.

Saskatchewan's funding for FNUC was pulled on Wednesday. The money represents about a fifth of the school's annual budget.

One day later, FSIN voted to dissolve the school's board of governors and place senior management on administrative leave.

Turmoil at the school had been brewing for years as it grappled with controversies surrounding senior staff and allegations of political interference and mismanagement.

Federal grants may be lost

Now, the status of more than $7 million the school receives in federal grants is currently in question and Indian and Northern Affairs Minister Chuck Strahl said he's not sure what will happen to that money.

"There's no misreading the seriousness of this," Strahl told CBC News.

"When the province says they've lost confidence and will not support the university moving forward. It's hard to misinterpret that. It's pretty unequivocal language," he said.

Strahl said moves by FNUC to dissolve the board and place staff on leave are a good start, but he also said it may be too little, too late.

He said he's raised issues about oversight at the school with FSIN leaders in the past two years, but change has been slow to come.

"[I've] not only urged them but said that we're withholding half your funding until you get your house in order … we've been very aware of the difficulties. We've shared the concerns that the province has had," Strahl said.

Strahl, however, promised a "herculean effort" to ensure FNUC students' needs are met.

FSIN leader Chief Guy Lonechild has vowed to create an interim board of governors early this week in an effort to renew confidence in the university as it tries to transition into an uncertain future.

"We're calling on the students and everyone else, all the stakeholders here, to ensure the federal funding is maintained," Lonechild said in an interview with CBC News on Friday.

Although university administrators were put on leave, other officials from the institution will be on the job, although closely monitored, Lonechild said.

He also said that he, the clerk of the legislature and the legal counsel for the federation will be among those helping with the transition.