Aboriginal groups are concerned that a federal government bureaucrat who is not aboriginal has been chosen to be the new executive director of the Indian Residential Schools Truth and Reconciliation Commission.

Aideen Nabigon, who has worked for the federal government on issues arising from the legacy of Indian residential schools, has replaced Bob Watts, former chief of staff to the national chief of the Assembly of First Nations.

Watts, who was seconded from the assembly to work as interim executive director, said this week that he was surprised that he received a letter last month saying the commission was activating the termination clause in his contract.

"I'm really at a loss to figure out what's going on except it's quite likely they're not honouring the job offer they made me," he said.

"I've put my heart and soul into this process and made commitments to survivors across the country that I was going to work hard for their benefit and not having that opportunity is tough."

While Nabigon has treaty status, Watts is from the Mohawk and Ojibway Nations in Ontario. He was directly involved in negotiating the residential schools settlement for the assembly.

Phil Fontaine, national chief of the Assembly of First Nations, said this week that he is worried that the federal government is behind the change in staff and that the appointment is another example of the federal interference in the commission.

"The issue here is not colour. The issue is competence and understanding and experience. That's OK as long as the independence of the TRC is not compromised in any way," he said.

Edward John, a lawyer and member of the Union of B.C. Chiefs, said the appointment is raising questions because aboriginal leaders believe that the executive director of the commission should not simply be a federal appointee.

The commission is charged with examining the legacy of abuse in Indian residential schools.

"We certainly want to make sure there is someone there who understands residential schools, who understands survivors, and not just another mandarin from Ottawa," John said.

Chief commissioner Harry LaForme defended his decision to hire Nabigon, saying he should have the independence to hire the person he thinks is best for the job.

"When it's interference and influence that's being attempted through aboriginal organizations like the AFN, then it's just me being accused of getting into bed with the federal government," he said.

"And I will defend the independence of the commission from that kind of influence as much as I will from the influence of government."

LaForme said the commission needs to strike a balance between the federal government and aboriginal interest groups and be independent from both.

He said Nabigon is an excellent choice for executive director. "She's worked on many aspects of the settlement agreement. I'm satisfied," he said.

"She's working out marvelously. I'm quite delighted with her work."

Last summer, the assembly protested another hiring. It urged LaForme to reconsider a decision to hire lawyer Owen Young, who had last worked for the Ontario government in a court case against aboriginal leaders.

The federal government formed the commission as part of the court-approved Indian Residential Schools Settlement Agreement that was negotiated between legal counsel for former students, legal counsel for the churches, the federal government, the assembly and other aboriginal organizations.

The commission has been asked to provide former students with an opportunity to share their experiences in a safe and culturally appropriate manner.

Its purpose is to create a historical account of the residential schools, help people to heal, and encourage reconciliation between aboriginals and non-aboriginal Canadians.

The TRC has a budget of $60 million. It was formally established on June 1, 2008, and is expected to complete its work within five years.