Ottawa has offered to relocate the entire aboriginal community of Kashechewan in northern Ontario to higher ground.

The offer was made during a meeting between native leaders and Indian Affairs Minister Andy Scott on Thursday night.

There has been no formal reaction yet from the leaders of the Cree reserve on the shores of James Bay that has been at the centre of a political storm for the past week because of a contaminated water crisis.

Andy Scott

Prime Minister Paul Martin has promised to clean up the E. coli contaminated water. "We are very concerned about this totally unacceptable situation," Martin told the House of Commons.

The Opposition demanded repeatedly during question period Scott resign.

Conservative Leader Stephen Harper called Scott "incompetent."

A young protester draws attention to Kashechewan's water woes. (File Photo)

Harper criticized Scott for visiting the community in August and refusing to drink the water, and then doing nothing for eight weeks after his return to Ottawa.

Calgary Conservative Jim Prentice backed Harper, saying: "While the people of Kashechewan were being poisoned by E.coli and hepatitis, this minister slept."

Martin defended his cabinet minister, accusing the Opposition of being insincere.

"We've had cabinet meetings with aboriginal leaders, we've had round tables ... day after day, this Opposition has said nothing for aboriginal Canadians, day after day, they have voted against every single proposition we've had for aboriginal Canadians."

Earlier in the day, Scott shouted down questions by reporters over whether he will resign after emerging from a cabinet meeting. Dozens of residents on the Cree reserve have had to leave the community to get medical treatment.

The minister has been under scrutiny since the Ontario government decided to fly dozens of people from Kashechewan to Sudbury, 650 kilometres to the south. They are being treated for skin rashes and other medical problems aggravated by five years of on-and-off water contamination. Another 175 people are scheduled to be flown out Thursday night.

Scott told CBC News that he met with representatives from Kashechewan in mid-August to discuss what should be done with the water treatment plant that seems to be at the root of the problem.

"The community said they wanted no more Band-Aid solutions," Scott said about why he did not take immediate action to fix the problem. "They wanted to live like the rest of Canada, and I agreed with that ...

Scott also rejected criticism of Ottawa's decision to put an intake pipe for the water treatment plant downstream along the Albany River from the reserve's sewage lagoon.

"The problem is the community is within tidal waters, so within the course of the day, the tide comes up and reverses the flow," he said.

The federal government did not ignore the immediate problems at Kashechewan while it worked on a long-term plan for the community, Scott insisted. Ottawa sent in extra water engineers, more health officials and "thousands – I think 16,000 – 18-litre bottles [of water] a day."

Ontario Premier Dalton McGuinty has accused the federal government of being "missing in action" in addressing the problems at Kashechewan and other native communities living under boil-water orders.

Scott denied that Ottawa has neglected its duties on Canada's reserves, saying that in 2003 it initiated a $1.6-billion, five-year plan to improve water services.

• INDEPTH: Boil-water advisories

That kind of talk did not go over well with Phil Fontaine, leader of the Assembly of First Nations.

. "It needs to be addressed immediately. We can't afford to wait ..., Fontaine said in Ottawa on Thursday

"There are at least 100 First Nations communities that are in a boil-water situation. There are at least 40 of those in Ontario."

Kashechewan Chief Leo Friday called it a "travesty." "If [the federal government] had listened about four years ago, this would have been prevented."

In 2001, he said, Kashechewan commissioned an engineer to look at its problem-plagued water service and other infrastructure in the community. The report was handed to Scott on Aug. 17 – it was the community's second meeting with the minister concerning its critical water situation.

"We did the study ourselves, with our resources," he said. "At that time and to date, we never got anything from the government ...